How are the premiums for the current IPOs performing in the unofficial grey market? Have they been impacted by the crash in Sensex?

You are absolutely right that the sharp cut in Sensex is having an impact on the grey market premiums too. On Monday the 812 points fall in Sensex, led to the unofficial grey market premiums on the current IPOs falling substantially to reflect the higher market risk.

This applies across the board to the grey market premiums of CAMS, Chemcon Specialty Chemicals and Angel Broking. While Chemcon Specialty Chemicals and CAMS IPOs opened for subscription on 21 September, Angel Broking IPO opens on 22 September.

Due to the sharp fall in the Sensex on Monday, the grey market premiums have fallen across the board. However, you must note that these grey market premiums are unofficial prices and cannot be construed as any valid indication of how the IPOs will open post listing.

For instance, the grey market premium for CAMS has fallen from Rs.345 to Rs.290; Chemcon from Rs.255 to Rs.240 and Angel Broking from Rs.75 to Rs.30. The belief is that grey market premiums won’t impact retail and QIP investors but funded HNI investors will be impacted.

It needs to be recalled that at the end of day-1, Chemcon was oversubscribed 4.33 times already while CAMS crossed the halfway mark. But the much bigger test would be the response to Angel Broking, which has enjoyed lower levels of grey market premiums.