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Grey Market Premiums Down; Is the IPO Hype Out of Fizz?

Published 12-08-2021, 04:42 pm
Updated 12-08-2021, 04:44 pm

By Aditya Raghunath

Investing.com -- The last two weeks have seen grey market premiums (GMPs) for IPOs fall down for stocks by a huge margin. Evidence of this is in the subdued listing of companies like Glenmark Life Sciences Ltd (NS:GLEM) and Rolex Rings Ltd (BO:ROLE).

Glenmark Life Sciences closed day one at Rs 748.5, a premium of less than 4% from its issue price of Rs 720. It had a GMP of Rs 90 so the listing was a pretty big let-down. Likewise, Rolex Rings had a GMP of Rs 480 four days before its listing date but it listed at a 33% premium at Rs 1,200 compared to its issue price of Rs 900. It closed day one at Rs 1,167.

GMP for Devyani International, the largest franchisee for brands like KFC, Pizza Hut and Costa Coffee, has fallen from Rs 75 when the IPO subscription was on to Rs 45 on August 11. Windlas Biotech has seen its IPO fall 50% from Rs 80 to Rs 40. Exxaro Tiles didn’t have a high GMP to begin with, just Rs 14 - Rs 15 and even that has fallen to Rs 8 – Rs 9.

Krsnaa Diagnostics has seen its GMP fall from Rs 435 to Rs 270 while CarTrade Tech has seen a hige fall from Rs 700 to less than Rs 200.

Does this mean the days of huge listing gains are over?

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