InvestorQ : Is the GMP a reliable measure and can you tell me about the grey market premium of Vedanta Learning Solutions and Hariom Pipe Industries?
Rutuja Nigam made post

Is the GMP a reliable measure and can you tell me about the grey market premium of Vedanta Learning Solutions and Hariom Pipe Industries?

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1 month ago
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Let me answer the first part of your question first. The GMP is not an official price point, just a popular informal price point. There is no regulatory sanction to it. However, it has proved to be a good gauge of demand and supply for the IPO in the past and gives a broad idea of how the listing will be. In short, the GMP is a good mirror of the real story ahead of listing. More than the actual price, it is the GMP trend over time that really gives insights.

Let me know talk about the GMP of Veranda Learning Solutions. The Rs.200 crore IPO has been priced in the band of Rs.130 to Rs.137. The stock is slated to list on 11th April, Monday. Since the stock of Veranda started trading informally in the grey market, its GMP has been static at about Rs.15 per share. This shows reasonable interest in the grey market ahead of the IPO listing, despite tough markets. How do we interpret this GMP?

If you consider upper band of Rs.137, then the GMP of Rs.15 signals an indicative price level of Rs.152 per share. This is the likely listing price based on informal sources. Now, the GMP of Rs.15 on a price of Rs.137 indicates a listing premium of 10.95% over the listing price. The GMP is an important informal indicator of listing price, but can often be quite volatile.

Let me know talk about the GMP of Hariom Pipe Industries. The Rs.130.05 crore IPO has been priced in the band of Rs.144 to Rs.153. The stock is slated to list on 13th April, Wednesday. Since the stock of Hariom Pipe started trading informally in the grey market in last 3 days, its GMP has been static at Rs.15 per share. This shows decent interest in the grey market ahead of the IPO listing, amidst tough markets. How do we interpret this GMP?

If you consider upper band of Rs.153, then the GMP of Rs.15 signals an indicative price level of Rs.168 per share. This is the likely listing price based on informal sources. Now, the GMP of Rs.15 on a price of Rs.153 indicates a listing premium of 9.80% over the listing price. The GMP is just an important informal indicator of listing price, but can often be quite volatile.

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