Vertexplus Technologies IPO GMP (Grey Market Premium)

Vertexplus Technologies IPO, worth Rs. 14.20 crore comprises entirely of a fresh issue of the IPO amount. The total SME IPO of Vertexplus Technologies Ltd entails the issue of 14.796 lakh shares at a price band of Rs(91 to 96) per share. At the upper end of the band, the issue size aggregates to Rs. 14.20 crore. The stock has a face value of Rs. 10 and retail bidders can only bid in minimum lot size of 1,200 share each, entailing a minimum investment of Rs. 115,200 in the IPO. That is also the maximum that a retail investor can apply for in the IPO. In the case of HNI / NII investors, they can bid for a minimum 2 lots of 2,400 shares entailing a minimum investment of Rs. 230,400. As per the terms of the offer, 50% is reserved for QIB investors, 35% of the net offer is reserved for retail investors and the balance 15% for HNI / NII investors. Market making portion comprises 74,400 shares.

The issue opens for subscription on 02nd March 2023 and closes for subscription on 06th March 2023 (both days inclusive). The basis of allotment will be finalized on 10th March 2023 and the refunds will be initiated on 13th March 2023. In addition, the demat credits are expected to happen on 14th March 2023 and the stock is scheduled to list on 15th March 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 3-4 days prior to IPO opening and continues till the listing date; but in this case the GMP trading started only on 27th February 2023. In the case of Vertexplus Technologies Ltd, we already have GMP data for the last 2 days, which should give a reasonable picture of the likely listing to begin with.

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, albeit not an official one. 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 Vertexplus Technologies IPO GMP for which the data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around Rs. 12 and has since tapered to Rs. 8 per share. Of course, we have to wait for the actual subscription numbers to flow in when the issue opens for subscription and also watch the progress, as that would have a very significant impact on the GMP. In the past, stocks which got oversubscribed in the IPO also saw a very robust positive shift in the grey market pricing. For a start, Vertexplus Technologies IPO has shown good traction in the grey market.

If you consider the upper band price of the IPO of Vertexplus Technologies IPO at Rs. 96, then the likely listing price is being signalled at around Rs. 106 per share as per the GMP indicator on 28th February 2023. This is dynamic and keeps changing. One data point to track will be the real time subscription update on the stock as that would chart the GMP course from here.

The GMP of Rs. 10 on a upper band IPO price of Rs. 96 indicates a listing premium of a healthy 10.42% for Vertexplus Technologies Ltd over the listing price. That pre-supposes a listing price of approximately Rs. 106 per share, when Vertexplus Technologies Ltd lists on 15th March 2023. Of course, these are approximations, so you must keep a margin of safety. However, that would depend on the GMP sustaining over the next few days after the issue opens. The best thing one can do with the GMP is to observe the trend closely as that gives the best hints on listing status. Focus on the time series trend than on numbers. Remember, that the GMP can also be negative, which is illustrative of a discount listing.

Vertexplus Technologies Ltd is a certified IT services company around for 13 years. It is engaged in the business of consulting, outsourcing, infrastructure, digital solutions and digital services. It offers clients 5 delivery models viz. offshore model, onsite model, hybrid model, global model and the strategic partnership model. Vertexplus has 1250 years of combined manpower experience and over 1,000 services in flow across 700 clients. Some of its marquee clients include Airtel, Paytm, Nokia, MTS, Hindustan Power, Perkin Elmer, CII, Borosil, FIITJEE, Fab India and Best Western. It offers new age services like strategy & architecture, digital transformation, security & risk management, enterprise mobility, application engineering and integration. Its domain expertise is across AI, extended reality, visual analytics, video analytics, IOT and blockchain.

Vertexplus Technologies Ltd will use the funds for working capital needs of the company and for general corporate purposes. Post the IPO, the promoter share in equity will dilute from the current 100%. The IPO is being lead managed by Beeline Capital Advisors Private Limited, while Skyline Financial Services Private Limited will be the registrars to the issue.