InvestorQ : How is Harsha Engineers performing in the grey market or GMP?
Khushi Patel made post

How is Harsha Engineers performing in the grey market or GMP?

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Dhwani Mehta answered.
3 weeks ago
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The Rs.755 crore IPO of Harsha Engineers comprises of a fresh issue of Rs455 core and an offer for sale (OFS) of Rs300 crore. The price band for the IPO is between Rs314 to Rs330 per share. The issue opens for subscription on 14th September 2022 and closes on 16th September 2022 (both days inclusive). While basis of allotment will be finalized on 21st September 2022 listing will happen on 26th September 2022. The grey market price (GMP) normally starts about 4-5 days prior to IPO opening and continues till listing date.

GMP is impacted by the market conditions as well as the extent of subscription for the IPO across the retail and the QIB segments. Generally, strong QIB subscription is a trigger for a spike in GMP. Remember that GMP is not an official price point, just a popular informal price point. However, it has been observed to be a good gauge of demand and supply for the IPO, albeit informal. Here is a quick GMP summary for Harsha Engineers International Ltd for the days, data is available.

08th Sep

09th Sep

10th Sep

12th Sep

13th Sep

14th Sep

15th Sep

Rs120

Rs210

Rs220

Rs220

Rs210

Rs203

Rs225

GMP trend shows that the grey market premium has surged from the open and stabilized above the Rs200 mark. For a start, Harsha Engineers International Ltd has shown good traction in the grey market. If you consider the upper price band of Rs.330 as the indicative price for the IPO, then the likely listing price is being signalled at around Rs.555 per share. The GMP of Rs.225 on a likely upper band pricing of Rs.330 indicates a listing premium of a healthy 68.2% over the listing price. That pre-supposes a listing price of approximately Rs.555 per share, when Harsha Engineers lists on 26th September 2022.

An important point to remember is that it is not just the absolute GMP number but the trend of the GMP that is more important. In this case, the spike in GMP on day 1 has been sustained through and that is a very good signal. After all, it is a hint and nothing conclusive about it.

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