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    Grey market premia drop for listing candidates, hurt investors' sentiment

    Synopsis

    On Wednesday, grey market premia of CAMS and Chemcon fell about 15 per cent each to Rs 312 and Rs 320 from Rs 365 and Rs 360, respectively, on Tuesday.

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    Broader market indices were faring worse than their headline peers as Nifty Smallcap slipped 2.03 per cent while Nifty Midcap dropped 1.63 per cent. Broadest index on NSE, Nifty 500 was down 1.50 per cent.

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    New Delhi: As Chemcon Speciality Chemicals and Computer Age Management Services (CAMS) gear up to debut on Dalal Street on Oct. 1, volatility in the broader market is impacting grey market premia ahead of their listing. Grey market premia of recent IPOs have been hammered down by the recent nervousness in the market, and this may bring down potential listing gains of the stocks.

    On Wednesday, grey market premia of CAMS and Chemcon fell about 15 per cent each to Rs 312 and Rs 320 from Rs 365 and Rs 360, respectively, on Tuesday.

    Dinesh Gupta of UnlistedZone said, "We expect decent listings for CAMS and Chemcon. The premia have mildly corrected from peaks, but these companies, with sound fundamentals, should be able to hold their ground."

    Similarly, the euphoria for Mazagon Dock Shipbuilders is also fading out, as grey market premium on the unlisted shares of the company has slipped to Rs 125 from Rs 140. The premium for UTI AMC shares has dropped by half from Rs 42 to Rs 20.

    The drop in grey market premia has made the dealers in the unlisted space alert. They are advising investors to be cautious before putting their money in stocks, even after listing.

    Abhay Doshi, an independent dealer at Unlisted shares, said there is volatility in the broader market, which is hurting deals in the grey market. "If the market falls further, the sentiments may get worse."

    He said companies with poor fundamentals and weaker subscriptions are likely to be get impacted more, if the market turns weak.
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    4 Comments on this Story

    Amit Gautam25 days ago
    Grey market gives a practical approach for listing gain.
    We all are here to increase our wealth not to play with whims of anyone.
    Snrj Investment Academy26 days ago
    Sentiments are being changed by News like these. Those who invest in IPO should look at the fundamentals of the company instead of listing gain.If you are so sure of the company fundamentals nobody in this world can influence you to do panik sell. Temporary volatility will be created in market to accumulate Good shares at low level.Also brokers will come up with high priced IPOs to utilize the euphoria of IPO which we can see in case of UTI. Visit YouTube channel "snrj investment academy" for analysis of fundamentally strong shares and good mutual funds
    Manu S Hegde26 days ago
    Low liquidity & volatile markets is causing high networth investors to look away from risky avenues like IPOs & REITs. Most of the current IPOs are likely to list well below their lower price limits
    The Economic Times