Currently, even though Sensex and Nifty closed with losses for two consecutive days, Indigo Paints has been commanding a strong grey market premium.
The Rs 1,170-crore initial public offering (IPO) of Indigo Paints saw a robust response from investors from all corners, getting 116 times subscription so far on the final day of bidding. Data available on the bourses showed that investors bid for 64 crore equity shares against 55.18 equity shares that were on offer. Indigo Paints was the second IPO of 2021 after IRFC. Non-institutional investors (NII) have, so far, subscribed the issue most, submitting bids 262 times their portion; followed by Qualified Institutional Buyers (QIB) who have subscribed their quota 188 times; and then Retail Investors with bids for 15.72 times their portion.
Grey market premium still strong
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The IPO closes today and is expected to be listed just a day after the Union Budget. Currently, even though Sensex and Nifty closed with losses for two consecutive days, Indigo Paints has been commanding a strong grey market premium. “Today the grey market premium of Indigo Paints is around Rs 850 per share,” Umesh Paliwal, Co-founder of UnlistedZone told Financial Express Online. Despite the volatile movement in Sensex, which saw the benchmark index sale 50,000 and then fall drastically for two consecutive sessions, Paliwal says, the grey market premium remains strong.
Listing expectations & strategy
“Listing of Indigo Paints is expected to be good, at least around 20-25% on the upside,” said Vishal Wagh, Head of Research, Bonanza Portfolio. Shares of the firm are expected to list just a day after the Union Budget, but Wagh does not see this to be a hindrance for the stock. On the other hand, Paliwal says he expects a healthy listing but does caution investors to keep an eye on any adverse announcement for stock markets in the Union Budget.
Talking strategy for the listing day, Vishal Wagh advises investors who will be allotted the shares, to book profits. “Profit booking is always a good strategy for IPOs, investors can rebuy it if the stock holds above listing price for a month,” he added.
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