The GK Energy IPO will close its bidding window in a short while from now. All eyes are on its grey market premium (GMP) and the subscription numbers. While the subscription numbers show moderately active participation by investors but the GMP is cooling off. What’s the big worry for investors now?
GK Energy IPO: Grey market premium – Cooling off from the peak
GK Energy started its IPO journey with a strong note in the grey market. The GMP had touched a peak of Rs 46 per share a day before the issue opened.
However, the excitement has since tapered. By the second day, the GK Energy GMP slipped to around Rs 25, and on the final bidding day, it hovered in the range of Rs 20–23.
At the top end of the price band, this translates into an estimated listing price of about Rs 173, or roughly a 13% premium over the issue price.
However, it is important to note that GMP is not the official listing price and may fluctuate based on the market condition.
GK Energy IPO: Subscription status
By mid-day on its Day 3 of bidding, GK Energy was subscribed more than 20 times overall so far. Breaking it down, retail investors subscribed 12.8 times, QIBs (qualified institutional buyers) put in bids 7.7 times, and NIIs (non-institutional investors) subscribed their portion a massive 53.6 times as of now.
GK Energy IPO: Issue size and fund utilisation
The Pune-based agricultural water pump manufacturer is raising about Rs 465 crore through this IPO. This includes a fresh issue worth Rs 400 crore and an offer-for-sale (OFS) of 42 lakh equity shares, valued at around Rs 65 crore.
Out of the fresh issue, around Rs 322 crore will be used to fund long-term working capital needs, with the rest set aside for general corporate purposes.