Urban Enviro Waste Management IPO GMP (Grey Market Premium)

Urban Enviro Waste Management IPO worth ₹11.42 crore, comprises of a fresh issue and an offer for sale (OFS) by promoters and early shareholders. The price for the fixed price issue has been set at ₹100. The fresh issue portion entails the issue of 9,20,000 lakh shares which at fixed issue price of ₹100 is worth ₹9.20 crore. The OFS portion entails the issue of 2,22,400 shares which at the fixed issue price of ₹100 is worth ₹2.22 crore. Overall, Urban Enviro IPO entails the issue of 11.424 lakh shares, which at fixed IPO issue price of ₹100 per share works out to total issue size of ₹11.42 crore.

The stock of Urban Enviro Waste Management Ltd has a face value of ₹10 and bidders can only bid in minimum lot size of 1,200 share each, entailing a minimum investment of ₹120,000 in the IPO at the fixed issue price of ₹100 per share. That is also the maximum that a retail investor can bid in the IPO. HNIs, NIIs can bid for minimum of 2 lots of 2,400 shares entailing an investment of ₹240,000. The table below captures the lot sizes permissible.

As per the terms of the offer, there is clear allocation done for the retail, non-retail portion and also the market making portion. The market maker portion is normally carved out of the HNI issue. It is a fixed price issue with the IPO price already fixed at Rs100 per share. The market making will be handled jointly by Asnani Stock Brokers and Nikunj Stock Brokers acting as the market makers for the SME IPO of Urban Enviro Waste Management Ltd. The company has set aside 57,600 shares for the market maker.

The issue opens for subscription on 12th June 2023 and closes for subscription on 14th June 2023 (both days inclusive). The basis of allotment will be finalized on 19th June 2023 and the refunds will be initiated on 20th June 2023. In addition, the demat credits are expected to happen on 21st June 2023 and the stock is scheduled to list on 22nd June 2023 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated. The grey market price (GMP) trading normally starts about 4-5 days prior to IPO opening and continues till the listing date. In the case of Urban Enviro Waste Management Ltd, we already have GMP data for the last 4 days, which should give a reasonable picture of the likely listing.

There are 2 factors that impact the GMP. Firstly, the market conditions have a deep impact on the GMP, especially the liquidity conditions in the market. Secondly, the extent of subscription for the IPO has a deep impact on the GMP as it is indicative of investor interest in the stock. GMP can also technically be in negative, which means the stock would list at a discount to the issue price.

There is one small point to remember here. The GMP is not an official price point, just a popular informal price point. However, in most cases, it has been observed to be a good informal gauge of demand and supply for the IPO. Hence it does give a broad idea of how the listing is likely to be and how the post-listing performance of the stock would be.

GMP tends to be a good mirror of the real stock story. More than the actual price, it is the GMP trend over time that gives insights about which direction the wind is blowing. Here is a quick GMP summary for Urban Enviro Waste Management Ltd for which the data is available.