Metro Brands IPO - Grey Market Premium

The Rs.1,367.51 crore IPO of Metro Brands Ltd consists of a fresh issue of Rs.295 crore and an offer for sale of Rs.1,072.51 crore. The issue has been priced in the band of Rs.485 to Rs.500 per share and the IPO allotment price will be discovered post the book building.

The issue opens for subscription on 10-Dec and closes for subscription on 14-Dec. The stock is scheduled to list on 22nd December. The GMP trading normally starts about 4-5 days prior to IPO opening and continues till the listing date. However, in the case of Metro Brands IPO, due to the delay in the announcement of the price band, there has been only two days of GMP available.

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 Metro Brands Ltd over the last 2 days for which GMP is available.