InvestorQ : How are the grey market price trends for Campus Activewear IPO and the Rainbow Children Medicare IPO?
sarah Leo made post

How are the grey market price trends for Campus Activewear IPO and the Rainbow Children Medicare IPO?

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Rashi Mehra answered.
3 weeks ago
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Let me talk about the grey market premium (GMP) for Campus Activewear first, which opens for subscription on 26th April. The GMP trend shows the premium scaling up from Rs.50 per share to Rs.60 per share; over last 5 days. There will be an impact of the actual subscription numbers. If you consider the upper end of the price band of Rs.292 as the indicative price, then the likely listing price is being signalled at around Rs.352 per share.

One data point to closely track will be the subscription update on the stock during the 3 days of IPO since that will also impact the GMP in a big way. The GMP of Rs.60 on a likely upper band pricing of Rs.292 indicates a listing premium at a healthy level of 20.55% over listing price. That essentially assumes a listing price of Rs.352 per share, when Campus Activewear actually lists on 09th May 2022. Of course, these are just informal estimates.

Let me now turn to the grey market premium (GMP) of Rainbow Children’s Medicare. Here the GMP has shown a steady trend staying at around Rs.50 per share for the last 5 days in succession. This is reflective of moderate levels of interest in the grey market ahead of the IPO and that is a positive signal. If you consider the upper end of the price band of Rs.542 as indicative price, likely listing price is being signalled at around Rs.592 per share.

Needless to say, you must keep a tab on the subscription update on the stock once the IPO opens on 27th April as that has a deep impact on the GMP. In case of Rainbow, the GMP of Rs.50 on a likely upper band of Rs.542 indicates listing premium of approximately 9.23% over the listing price. The assumption is of a listing price of Rs.592 per share, when Rainbow Children's Medicare Ltd lists on the stock markets on 10th May 2022.

A quick word about GM and the caution you need to exercise. GMP is an important informal indicator of likely listing price, but it can be very volatile and has no official sanction. Investors must note that the GMP is only an informal indication based on pre market expectations. However, for traders in the stock looking for short term profits, GMP gives a reasonably good indication of possible listing price and the likely listing returns on the IPO.

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