Two mainboard initial public offerings (IPOs) will close their bidding windows today, August 19, giving investors a final chance to participate in the issues. The Lalithaa Jewellery Mart IPO and Horizon Industrial Parks IPO have received significantly different responses from investors during the first two days of bidding.
While Lalithaa Jewellery Mart has received a lot of interest from retail and non-institutional investors, Horizon Industrial Parks has received a rather subdued response so far. Both IPOs are showing good grey market premiums (GMPs), according to market-tracking platforms.
Investors should also note that GMP is a very unofficial indicator and can change in a moment with market sentiment. A positive GMP does not imply that an IPO is going to be at a premium.
Lalithaa Jewellery Mart IPO subscription status
Lalithaa Jewellery Mart IPO has received a much stronger response from investors. By the evening of August 18, the issue had been subscribed 3.25 times overall.
The retail category was subscribed 2.96 times, and the qualified institutional buyers (QIB) category (other than anchor investors) attracted a 1.08 times subscription. The non-institutional investor (NII) category had a lot of demand, with 6.84 times subscription.
The numbers indicate extremely high participation from individual investors as well as high-net-worth and other non-institutional applicants.
Lalithaa Jewellery Mart is in jewellery retail and has a significant presence in South India. The company primarily targets customers who are seeking jewellery at value-oriented price points.
Lalithaa Jewellery Mart IPO GMP
According to Investorgain data cited in the supplied information, the grey market premium for Lalithaa Jewellery Mart was around ₹40 in the early morning of August 19.
With the upper end of the IPO price band fixed at ₹201, the implied listing price based on the GMP would be around ₹241. This allows for a listing gain of about 19.90% over the upper issue price.
However, investors should not consider the GMP-based estimate as a guaranteed return. The actual listing prices depend on market conditions, demand, and investor sentiment on the listing day.
Lalithaa Jewellery Mart price band and lot size
The IPO has a price band of ₹190 to ₹201 per share. The minimum retail lot consists of 74 shares.
At the upper price band of ₹201, a retail investor would need about ₹14,874 to apply for one lot.
The ₹1,700 crore book-built issue consists of a fresh issue of 5.97 crore shares aggregating to ₹1,200 crore and an offer for sale of 2.49 crore shares worth ₹500 crore.
Anand Rathi Advisors is the book-running lead manager, while MUFG Intime India is the registrar to the issue.
Horizon Industrial Parks IPO subscription status
Horizon Industrial Parks IPO has received a much weaker response so far. By the evening of August 18, the issue had been subscribed only 0.25 times overall.
The retail part was subscribed 0.46 times, while the QIB category excluding anchor investors was subscribed 0.22 times. The NII category was subscribed 0.16 times.
The figures indicate that the issue had not yet received sufficient demand to cover the shares offered by the second day of bidding.
Horizon Industrial Parks IPO GMP
The grey market premium for Horizon Industrial Parks had reportedly declined to around ₹1 in the early morning of August 19, according to Investorgain data.
With the upper price band at ₹60, the implied listing price based on the GMP is around ₹61. This would give us a listing gain of about 1.67%.
The relatively small GMP indicates limited expectations of a large listing premium at present. However, the GMP can change before listing and should not be considered as a reliable prediction of the actual listing price.
Horizon Industrial Parks price band and lot size
The price band for the Horizon Industrial Parks IPO is set at ₹57 to ₹60 per share.
Retail investors are required to apply for a minimum lot of 250 shares. At the upper price band of ₹60, the minimum investment for one retail lot would be ₹15,000.
JM Financial is the book-running lead manager while KFin Technologies is the registrar for the issue.
Which IPO is attracting more attention?
Based on subscription figures available until the evening of August 18, Lalithaa Jewellery Mart has clearly attracted more investor interest than Horizon Industrial Parks.
Lalithaa Jewellery Mart's total subscription is 3.25 times compared to Horizon Industrial Parks with 0.25 times. The difference is more pronounced in the NII segment, where Lalithaa Jewellery Mart has a subscription of 6.84 times.
For investors interested in either issue, subscription data and GMP are only two factors to consider. Business fundamentals, valuation, financial performance, industry conditions, debt levels, growth prospects, and the intended use of IPO proceeds need to be considered as well.
With both IPOs closing on August 19, investors have limited time to review the issues before making a decision. As with any equity investment, IPO applications carry market risk and positive GMP numbers should not be interpreted as guaranteed listing gains or guaranteed returns.
Comments
Please to leave a comment on this article.