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Anand Rathi Wealth IPO: Grey market premium drops 80% ahead of listing

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Anand Rathi Wealth GMP: According to data from IPOWatch, the GMP of Anand Rathi Wealth stands at Rs 225, which indicates that shares are likely to list at Rs 25 above the upper end of the price band.

Anand Rathi Wealth IPO: Grey market premium drops 80% ahead of listing
The grey market premium of Anand Rathi Wealth has been declining steadily ahead of the company's debut on Dalal Street. Anand Rathi Wealth commanded a premium of Rs 25 in the grey market on Tuesday. Anand Rathi's grey market premium (GMP) had stood at Rs 125 a few days ago.
Anand Rathi Wealth is the wealth management arm of Anand Rathi Financial Services. Its shares are likely to list on stock exchanges BSE and NSE on December 14.
Grey market is an unofficial market for shares of unlisted companies.
Anand Rathi Wealth's IPO, to raise Rs 660 crore, was subscribed 9.8 times, receiving bids for 8.3 crore shares as against the 84.8 lakh shares on offer.
The categories of non-institutional investors and retail investors were subscribed 25.4 times and 7.8 times respectively. The portion reserved for qualified institutional buyers (QIBs) was booked 2.5 times.
Under the IPO, Anand Rathi Wealth shares were available for bidding in the range of Rs 530-550.


How GMP changed during bidding process
On the first and second day of bidding, Anand Rathi's GMP was steady at Rs 125. The IPO saw a subscription of 1.6 times on the first day, and three times on the second day. The second day of the bidding process coincided with a market-wide sell-off, after which, Anand Rathi Wealth's GMP slid to Rs 100 over the weekend.
On Monday, which also saw a sell-off in the market,  the GMP declined further, to Rs 60.
Analysts say investors still seem to be cautious on IPOs despite a rebound in the market.
The weak stock market debuts of companies like Paytm and the tepid response to the Star Health's IPO also seems to have added to investors' worries. Expensively priced issues and foreign investors pulling back from the markets is also making investors nervous.
What does GMP mean?
The grey market premium of an IPO-bound stock gives an early reflection of how investors are reading the company.
According to data from IPOWatch, the GMP of Anand Rathi IPO suggests the shares would list at Rs 25 above the upper end of the price range, i.e. Rs 575.
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