InvestorQ : When is Paytm listing in the market and what is grey market price for the stock?
Arti Chavan made post

When is Paytm listing in the market and what is grey market price for the stock?

Answer
image
Rutuja Nigam answered.
2 weeks ago
Follow

The grey market price, popularly called the GMP, is an unofficial price point. It is not any official market but more of an informal gauge of demand and supply for the IPO. Normally, the GMP is an estimate of the listing price ahead of the IPO and is based on factors like valuations, oversubscription, price discovery etc. It has been generally observed to be a good approximation of the real story, which is why it is popularly followed.

In the case of Paytm, the oversubscription was limited to 1.89 times and that was always likely to impact the GMP negatively. Also, the HNI portion was just subscribed to the extent of 24%. As of 16-Nov, just 2 days ahead of its listing on 18-Nov, the GMP of Paytm was at Rs.30 per share. It retraced sharply from a high of Rs.150 on 07-Nov to Rs.70 on 09-Nov and it is down to just Rs.30 in last 2 days. The hint is listing could happen close to issue price.

Now you need to understand that the GMP of Rs.30 for One97 Communications, the company that owns and operates the Paytm platform, translates into a 1.40% premium over IPO price of Rs.2,150. That would mean a likely listing at around Rs.2,180 on 18-Nov. Overall, the informal GMP is hinting at a tepid listing for Paytm.

0 Views