by Tanushree Jaiswal Last Updated: Aug 09, 2023 - 10:09 am 2.3k Views
Zeal Global Services IPO GMP (Grey Market Premium)
Zeal Global Services IPO worth ₹36.46 crore, comprises entirely of a fresh issue with no offer for sale (OFS) component in the IPO issue. Being a fixed price IPO, the issue price has already been fixed at the rate of ₹103 per share. The fresh issue portion entails the issue of 35.40 lakh shares which at the fixed IPO price of ₹103 per share is worth ₹36.46 crore. Since there is no OFS portion, the fresh issue size will also the total size of the IPO in the case of Zeal Global Services Ltd. The fresh funds raised through the IPO will be used for investment in subsidiaries for expansion, repayment of partial loans as well as for working capital and general corporate expenses. The stock will be listed on the SME segment of the NSE.
Zeal Global Services IPO 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 ₹123,600 in the IPO at the fixed IPO price of ₹103 per share. That is also the maximum that a retail investor can bid in the IPO. HNIs and NIIs can bid for minimum of 2 lots of 2,400 shares entailing an investment of ₹247,200. The table below captures the lot sizes permissible.
As per the terms of the offer, 50% of the net offer is reserved for retail investors and the balance 50% for the HNI / NII investors. The table below captures this quota allocation for IPO of Zeal Global Services Ltd.
|NII (HNI) Shares Offered||Not more than 50.00% of the Offer|
|Retail Shares Offered||Not less than 50.00% of the Offer|
Zeal Global Services IPO is a fixed price IPO with the price already fixed at the rate of ₹103 per share. The company has set aside 177,600 shares for the market maker, Rikhav Securities Ltd. The market maker typically provides liquidity on the counter of the stock post listing by offering buy and sell quotes on a continuous basis. This ensures liquidity post trading and also reduces the basis risk substantially.
The issue opens for subscription on 28th July 2023 and closes for subscription on 01st August 2023 (both days inclusive). The basis of allotment will be finalized on 04th August 2023 and the refunds will be initiated on 07th August 2023. In addition, the demat credits are expected to happen on 08th August 2023 and the stock is scheduled to list on 09th August 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.
Zeal Global Services IPO GMP details
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 Zeal Global Services 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 Zeal Global Services IPO for which the days, data is available.
In the above case, the GMP trend shows that the grey market premium has opened at around ₹0, and now it is up by ₹1. Of course, we have to await 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, Zeal Global Services Ltd has shown strong price traction in the grey market.
If you consider the fixed price of the IPO of Zeal Global Services Ltd at ₹103, then the likely listing price is being signalled at around ₹108 per share as per the GMP indicator on 26th July 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 ₹5 on the upper band of the IPO price of ₹103 per share indicates a listing premium of a moderate 4.85% for Zeal Global Services Ltd over the listing price. That pre-supposes a listing price of approximately ₹108 per share, when Zeal Global Services Ltd lists on 09th August 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.
Brief background of Zeal Global Services Ltd
Zeal Global Services Ltd, is an SME IPO on the NSE opening for subscription on 28th July 2023. The company, Zeal Global Services Ltd, was incorporated in the year 2014 to offer detailed and end-to-end logistic solutions, predominantly to the air cargo industry. It operates as a General Sales and Service Agent (GSSA) and also as a sales partner for various airlines to facilitate the logistics of their air cargo business. Zeal Global Services Ltd is headquartered in Delhi but operations are spread out across India.
Zeal Global Services Ltd has two verticals viz. cargo carrier service and passenger carrier service. Zeal Global Services Ltd curates logistics solutions for customers based on these verticals and the network and the skill sets built up over time. The company deploys its services across various industries including pharmaceuticals, automotive, fashion and industrials. It also offers sales, marketing, and administrative support as a value addition.
The fresh issue portion will be used to invest funds into subsidiaries, repay partial debt and also for working capital gap funding as well as for general corporate expenses. The issue will be lead managed by Expert Global Consultants Private Ltd while Skyline Financial Services Private Ltd will be the registrars to the IPO.
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