InvestorQ : Can you tell me about the grey market pricing of Archean Chemical Industries as I plan to apply for the IPO?
rhea Babu made post

Can you tell me about the grey market pricing of Archean Chemical Industries as I plan to apply for the IPO?

Answer
image
Riya Dwivedi answered.
4 weeks ago
Follow

The IPO of Archean Chemical Industries Ltd opens on 09th November 2022 and closes on 11th November 2022. Post the IPO, the stock is scheduled to list on 21st November 2022 on the NSE and the BSE. The grey market price (GMP) starts about 4-5 days prior to IPO opening and continues till the listing date. In the case of Archean Chemical Industries Ltd, we already have GMP data for the last 4 days.

01st Nov

02nd Nov

03rd Nov

04th Nov

Rs60

Rs61

Rs80

Rs60

GMP trend shows that the grey market premium has opened at Rs60, spiked to Rs80 and reverted to Rs60. If you consider the upper end of the price band of Archean Chemicals at Rs.407 as likely price, listing price is being signalled at around Rs.467 per share. Of course this data is dynamic and GMP can change sharply once the subscription data starts pouring in. The GMP of Rs.60 on a pricing of Rs.407 indicates a listing premium of 14.74% over the issue price, assuming that the price gets discovered at the upper end of the band.

How do you interpret the grey market price. Remember that the GMP (grey market price) does not have any official sanction or is it not some market determined price. On the other hand, it is just an informal indicator of likely listing price. It has been observed that the GMP tends to be quite dynamic and changes direction with the flow of news and events, hence the trend normally matters more than the absolute numbers. The best one can do with the GMP is to observe the trend closely as that gives the best hints on listing status. Ideally, investors should focus on the time series trend than on numbers.

5 Views