Find out how the Syrma SGS IPO is faring in the Grey Markets

The Rs.840 crore IPO of Syrma SGS Technology Ltd consists of a fresh issue of Rs.74 crore and an offer for sale of Rs.766 crore. The issue has been priced in the band of Rs.209 to Rs.220 per share and the IPO allotment price will be discovered post the book building. 

The Syrma SGS IPO opens for subscription on 12-Aug and closes for subscription on 18-Aug. The stock is scheduled to list on 26th August. The GMP trading normally starts about 4-5 days prior to IPO opening and continues till the listing date. 

There are 2 factors that impact the GMP. Firstly, the market conditions have a deep impact on the GMP. Secondly, the extent of subscription also has a deep impact on the GMP as it is indicative of investor interest in the stock.

There is one small point to remember here. The GMP is not an official price point, just a popular informal price point. However, in most cases, it has proved to be a good informal gauge of demand and supply for the IPO. Hence it does give a broad idea of how the listing is likely to be and how the post-listing performance would be. 

While the GMP is just an informal approximation, it has been generally seen to be a good mirror of the real story. More than the actual price, it is the GMP trend over time that really gives insights about which direction the wind is blowing. Here is a quick GMP summary for Syrma SGS Technology Ltd over the last 5 days for which GMP is available.

In the above case, the GMP trend shows that the grey market premium has hovered in the range of Rs20 to Rs28 and the general trend has been edging lower. Of course, we have to await for the actual subscription numbers to flow in as that would have a deep impact on the GMP. But, clearly this shows reasonable interest in the grey market ahead of the IPO.

If you consider the upper end of the price band of Rs.220 as the indicative price, then the likely listing price is being signalled at around Rs.240 per share. One data point to track will be the subscription update on the stock as that would chart the GMP course from here.

The GMP of Rs.20 on a likely upper band pricing of Rs.220 indicates a listing premium of just about 9.1% over the listing price. That presupposes a listing price of approximately Rs.240 per share, when Syrma SGS Technology Ltd lists on 26th August 2022. 

GMP is an important informal indicator of likely listing price, although it tends to be quite dynamic and changes direction with the flow of news. However, investors must note that this is just an informal indication and has no official sanction.