Medplus Health Services IPO - Grey Market Premium

5paisa Research Team 5paisa Research Team 15th December 2022 - 01:28 pm

The Rs.1,398.30 crore IPO of Medplus Health Services Ltd consists of a fresh issue of Rs.600 crore and an offer for sale of Rs.798.30 crore. The issue has been priced in the band of Rs.780 to Rs.796 per share and the IPO allotment price will be discovered post the book building.

The issue opens for subscription on 13-Dec and closes for subscription on 15-Dec. The stock is scheduled to list on 23rd December. 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 Medplus 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.

A quick GMP summary for Medplus Health Services Ltd over the last 4 days for which GMP is available.

07-Dec	08-Dec	09-Dec	10-Dec
Rs.220	Rs.300	Rs.300	Rs.300

In the above case, the GMP trend shows that the grey market premium has scaled up from Rs.220 per share to Rs.300 per share over the last 4 days. Of course, we have to await for the actual subscription numbers to flow in. But, clearly this shows good interest in the grey market ahead of the IPO.

If you consider the upper end of the price band of Rs.796 as the indicative price, then the likely listing price is being signalled at around Rs.1,096 per share. One data point to track will be the listing day performance of Star Health IPO on 10-December, which got just 79% subscribed and had to reduce the size of the IPO by Rs.840 crore. That could hold the key to IPO market sentiments and also the grey market sentiments.

The GMP of Rs.300 on a likely upper band pricing of Rs.796 indicates a listing premium of a very robust 37.7% over the listing price. That presupposes a listing price of approximately Rs.1,096 per share, when Medplus Health Services lists on 23rd December.

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.

Also Read:-

Upcoming IPOs in 2021

Upcoming IPOs in December 2021