WomanCart IPO GMP (Grey Market Premium)

WomanCart IPO opens for subscription on 16th October 2023 and closes for subscription on 18th October 2023; both days inclusive. WomanCart Ltd has a face value of ₹10 per share and is a fixed price issue, with the IPO price already set at ₹86 per share. The IPO of WomanCart Limited will only have a fresh issue component and no offer for sale (OFS) portion. As part of the fresh issue portion, WomanCart Limited will issue a total of 11,12,000 shares (11.12 lakhs), which at the fixed IPO price of ₹86 per share aggregates to a total fresh issue size of ₹9.56 crore. In the absence of any OFS component, the total issue size will also comprise the issue of 11,12,000 shares (11.12 lakhs), which at the fixed IPO price of ₹86 per share aggregates to a total issue size of ₹9.56 crore.

The IPO of WomanCart Ltd has a market making portion with a market maker portion allocation of 56,000 shares. Nikunj Stock Brokers Ltd, the market maker, will offer two-way quotes to ensure liquidity and low basis risk post listing. The promoter of WomanCart Ltd, Veena Pahwa, will see the promoter stake diluted from the current 78.01% to 57.40% post the IPO. WomanCart Ltd will use the fresh funds to meet expenses of branding and marketing as well as for app development and working capital needs. Narnolia Financial Services Ltd will be the lead manager to the issue and Maashitla Securities Private Ltd will be the registrar to the issue.  

About the GMP pricing for WomanCart IPO

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 WomanCart IPO, 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.

How has the GMP panned out in last few days

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 WomanCart IPO data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around ₹10, but has since stayed at ₹20 for which GMP data is available. Of course, we have to await for the actual subscription numbers to flow in after the issue opens for subscription on 16th October 2023 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, WomanCart Ltd has shown moderate to good traction in grey market.

If you consider the fixed IPO price of WomanCart Ltd at ₹86 per share, then the likely listing price is being signalled at around ₹96 per share as per the GMP indicator on 12th October 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 GMP of ₹10 on the upper end IPO price of ₹86 per share indicates a listing premium of a moderate to healthy 11.63% for WomanCart Ltd over the IPO issue price. That pre-supposes a listing price of approximately ₹96 per share, when WomanCart Ltd lists on 27th October 2023. Of course, these are purely 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 the absolute numbers.

How to apply for the WomanCart IPO

The minimum lot size for the IPO investment will be 1,600 shares. Thus, retail investors can invest a minimum of ₹137,600 (1,600 x ₹86 per share) in the IPO. That is also the maximum that the retail investors can invest in the IPO. HNI / NII investors can invest a minimum of 2 lots comprising of 3,200 shares and having a minimum lot value of ₹2,75,200. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. The table below captures the break-up of lot sizes for different categories.

As per the terms of the offer; 5.04% of the total issue size is reserved for the Market Makers, 47.48% for the HNI / NII investors and the balance 47.48% is reserved for the retail investors. The company has set aside 56,000 shares for the market maker, Nikunj Stock Brokers Ltd.

The issue opens for subscription on 16th October 2023 and closes for subscription on 18th October 2023 (both days inclusive). The basis of allotment will be finalized on 23rd October 2023 and the refunds will be initiated on 25th October 2023. In addition, the demat credits are expected to happen on 26th October 2023 and the stock is scheduled to also list on 27th October 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.