Vasa Denticity IPO GMP (Grey Market Premium)

Vasa Denticity IPO, worth ₹54.07 crore comprises of a fresh issue and an offer for sale (OFS) by promoters and early shareholders. The price band has been fixed in the range of ₹121 to ₹128 per share. The fresh issue portion entails the issue of 31.74 lakh shares which at the upper end of the price band at ₹128 is worth ₹40.63 crore. The OFS portion entails the issue of 10.50 lakh shares which at the upper end of the price band at ₹128 is worth ₹13.44 crore. Overall, the IPO entails the issue of 42.24 lakh shares, which at the upper price band of ₹128 per share works out to total issue size of ₹54.07 crore.

Vasa Denticity IPO has a face value of ₹10 and bidders can only bid in minimum lot size of 1,000 share each, entailing a minimum investment of ₹128,000 in the IPO at the upper end of the price band of ₹128 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 2,000 shares entailing an investment of ₹256,000. There are no such limits defined for the QIB portion. The table below captures the lot sizes permissible.

As per the terms of the offer, maximum of 50% of the net offer is reserved for the qualified institutional buyers (QIBs), not less than 15% of the offer is reserved for the HNI / NII investors and a minimum of 35% is reserved for the retail investors. It is a Book Built issue with the price band of ₹121 to ₹128 and the final price will be discovered through book building process. Hem Finlease Ltd will act as the market maker for the SME IPO of Vasa Denticity Ltd. The company has set aside 216,000 shares for the market maker.

The issue opens for subscription on 23rd May 2023 and closes for subscription on 25th May 2023 (both days inclusive). The basis of allotment will be finalized on 30th May 2023 and the refunds will be initiated on 31st May 2023. In addition, the demat credits are expected to happen on 01st June 2023 and the stock is scheduled to list on 02nd 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 Vasa Denticity Ltd, we already have GMP data for the last 2 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 Vasa Denticity IPO for which data is available.

If you consider the upper end of band price of the Vasa Denticity IPO at ₹128, then the likely listing price is being signalled at around ₹164 per share as per the GMP indicator on 20th May 2023. This is dynamic and keeps changing. One data point to track will be the subscription update on the stock as that would chart the GMP course.

The Vasa Denticity IPO GMP of ₹36 on the upper end of the book built IPO price of ₹128 indicates a listing premium of a healthy 28.13% for Vasa Denticity Ltd over the listing price. That pre-supposes a listing price of approximately ₹164 per share, when Vasa Denticity Ltd lists on 02nd June 2023. Of course, these are approximations, so you must keep a margin of safety. One needs to observe the trend of GMP closely as that gives the best hints on listing status. Look at the time series trend than on numbers.

Read What you must know about Vasa Denticity IPO

Here is a quick background of Vasa Denticity SME IPO on the NSE opening for subscription on 23rd May 2023. Vasa Denticity was incorporated in 2016 for marketing and distribution of a comprehensive portfolio of Dental Products. Their product portfolio includes consumables, instruments, equipment, and accessories for diagnosing, treating, and preventing dental conditions. Their online portal "Dentalkart.com" is their ecommerce delivery front. The online channel (Dentalkart.com) offers 300 domestic and international brands with a comprehensive product range of over 10,000 dental products.

Vasa Denticity manages logistics through its 13,000 SFT centralized distribution hub in Gurugram. Vasa also has strong proprietary brands. The fresh issue portion will be used to fund its working capital expenditure and enhancing the visibility of its brands. The issue will be lead managed by Hem Securities Limited while MAS Services Ltd will be the IPO registrar.