New Delhi: Despite volatility on Dalal Street, the IPO market is faring well if one goes by the signals from the gray market,

According to dealers tracking the gray market, listing bound companies are holding their ground in the unofficial market despite the weakness in the listed space.

Electronics Mart India (EMIL) is commanding a hefty premium of Rs 32-35 or about 60 per cent in the gray market over its IPO price band of Rs 56-59.

Similarly, Tracxn Technologies, whose IPO opened on Monday, is commanding a premium of Rs 8-10, about 10-12 per cent higher than its price band of Rs 75-80. The majority of brokerages have advised to avoid the issue.

That said, analyst views on EMIL were positive, thanks to its reasonable valuations, growth prospects and dominance in the markets. However, a few had raised concerns over dependence on major brands and online competition.

Abhay Doshi, co-founder of UnlistedArena said both the issues are smaller in size, attracting investors to them. However, sentiments are likely to be guided by key factors like market volatility in the near term, he added

“EMIL has a robust subscription and the fundamentals of the companies are good. One can expect fireworks on listing. However, one should wait and watch investor interest in Tracxn Technologies owing to its small size,” he said.

The Rs 500-crore primary offering of EMIL was subscribed 71.93 times between October 4-7. The quota reserved for qualified institutional buyers (QIBs) was subscribed a whopping 169.54 times, while the one reserved for non-institutional investors (NIIs) and retailers was subscribed 63.59 times and 19.72 times, respectively.

On the other hand, Tracxn Technologies was off to a muted start on the day one, with issue getting a subscription around 20 per cent so far.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)


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By Dipak

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