GMP of IPO, review, and other important details live

Investors often check the GMP of IPO (of an open issue) to gauge listing gains. Currently, a few IPOs are open for subscription, with exciting names like Vishal Mega Mart, well-known fintech player MobiKwik, Sai Life Sciences, and Rekha Jhunjhunwala backed Inventurus knowledge solutions. Here is the complete details of open IPOs, their GMP, our view and other key information, read to find out-

What is GMP of IPO

GMP or Grey Market Premium is the extra price that investors are offering to pay for a company’s shares before its Initial Public Offering (IPO) is listed on the stock exchanges. It’s an unofficial but important indicator of investor interest and market sentiment around an IPO that investors often take cues to apply for an IPO or leave. GMP is the difference between an IPO’s issue price and the price at which the shares are traded in the grey market. For example, if the issue price is ₹100 per share and the GMP is ₹30, then investors are willing to pay ₹130 per share in unlisted market.

Investors often use GMP to gauge potential gains and losses. A positive GMP indicates strong interest and potential for short-term gains (listing gains). A negative GMP can be a red flag, indicating that the IPO may be launched at a stretched valuation or that investors aren’t interested. But, GMP though often accurate, is not always true as GMP trades are usually settled with cash, and there’s no official settlement process. Instead, the buyer and seller agree on a bilateral arrangement leaving a chance to manipulate price.

Open IPO, GMP, Review and other key details

Vishal Mega Mart IPO

• Issue Snapshot:
  Issue Open: December 11 – December 13, 2024
• Price Band: Rs. 74 – 78
• Issue Size: Up to Rs 8000cr (Entirely Offer for sale)
• Face Value: Rs 10
• Book value: Rs 13.14 (as of September 30, 2024)
• Bid size: – 190 equity shares and in multiples thereof
• Issue Type- 100% Book built Issue

GMP of Vishal Mega Mart IPO is Rs 20-22 against the issue price of 78, suggesting approx 25% listing gains. Get the RHP of Vishal Mega Mart, click here

Vishal Mega Mart Limited (VMML) is a one-stop destination for middle and lower-middle-income India. It curates a diverse range of merchandise through its portfolio of own brands and third-party brands to fulfill the aspirational and daily needs of Indian consumers. It offers products across three major product categories, i.e., apparel, general merchandise, and fast-moving consumer goods, through a pan-India network of 645 Vishal Mega Mart stores (as of September 30, 2024) and its Vishal Mega Mart mobile application and website.

Vishal Mega Mart targets middle and lower-middle-income India. Its product assortment and consumer-centric approach aim to fulfill the daily and aspirational requirements of consumers with a focus on variety, affordability, quality, and convenience. VMML’s main play is variety, affordability, quality, and convenience.

The number of middle-income households in India has increased from approximately 201 million in Calendar Year 2018 to approximately 225 million households (approximately 945 million individuals) in Calendar Year 2023, driven by rapid economic development, growing formalization of employment, and a structural shift from an agrarian-based economy towards manufacturing and services.

It has a large network of stores in Tier 2 cities and beyond in India, with 451 stores as of September 30, 2024. With wider access to digital channels, consumers in these areas are increasingly exposed to new products and services, driving demand and expanding retail opportunities as they aspire to emulate higher-tier urban lifestyles.

Valuation and View

Vishal Mega Mart Ltd is focused on serving a large and fast-growing section of the Indian population with a Consumer-centric approach and has a loyal consumer base and a Diverse and Growing Portfolio of Own Brands with a Pan-India Presence along with Technology Enabled, Systems Driven Operations.
At the upper price band company is valuing itself at a P/E of 67.83 times, with an EV/EBITDA of 28.1x and a market cap of ₹ 35,168 cr which brings sales to Mcap at 3.5x (FY25 earnings estimate) post issue of equity shares and return on net worth of 8.18%.

Compared to peers, the primary issue of Vishal Mega Mart is close to fairly valued but given the growth prospects of the company, we advise a ‘subscribe’ with a long-term view (some listing gains are possible but investors should keep a long-term view).

Inventurus Knowledge Solutions LTD IPO

• Date of Opening- 12th December 2024
• Date of Closing- 16th December 2024
• Price Band (Rs)- 1,265 – 1,329
• Offer for sale (No. of shares)- 1,87,95,510
• Fresh Issue (Rs cr) – None
• Issue Size (No. of shares)- 1,87,95,510
• No. of shares- 1,87,95,510
• Face Value (Rs)- 1
• Post Issue Market Cap (Rs cr)- 21,704 – 22,802

GMP of Inventurus Knowledge Solutions is Rs 420 indicating close to 33% of listing gains.

Inventurus Knowledge Solutions Ltd (IKS) is a technology-enabled healthcare solutions provider, offering a care enablement platform for assisting physician enterprises in the US, Canada, and Australia. It partners
with outpatient and inpatient care organizations, allowing healthcare organizations to focus on their core operations. The company’s focus is on-

• Maximizing revenue from existing clients through a “land and expand” approach
• Focus on large healthcare organizations
• Move from a “human-led tech-enabled” model to a “tech-led human-enabled” model
• Bundling solutions for greater value-add
• Leverage automation and Generative Artificial Intelligence (AI) to aid operations
• Partner with innovative clients for product development and innovation

Valuation and View

At the upper price band of Rs 1,329, Inventurus Knowledge Solutions Ltd is valued at an FY24 P/E multiple of 61.5x on post-issue capital. The company has showcased remarkable financial performance over the years with Revenue/EBITDA/PAT growing at a CAGR of 54.3%/32.3%/26.1% respectively over the FY22-FY24 period. The company operates a unique business model and does not have any like-to-like comparable listed peers.

Though the company is showing remarkable growth but company’s margins (EBITDA and PAT margin) have shown a downward trajectory in the FY22 and FY24 periods, at 61.5 times P/E and 9x sales to Mcap, the issue is fairly to overpriced. But, due to its unique business model, we assign a ‘subscribe’ rating to the IPO for high-risk-taking investors with a long-term view. In this IPO listing gains are possible but Inventurus will be one of a kind listed company in the Indian market and can play out very well in the long term.

Sai Life Sciences

GMP of Sai Life Sciences is ₹40, considering the upper price band of ₹549, the expected listing price of the stock is ₹589, a premium of 7.3 percent.

The ₹3,043 crore book-built issue, Sai Life Sciences IPO, combines the new issuance of equity shares of about ₹950 crore and an offer for sale (OFS) of up to 3.81 crore equity shares by promoter, investor shareholders, and various other shareholders. Sai Life Sciences is a global player in the contract research, development, and manufacturing organization (CRDMO) segment. it provides “end-to-end services across the drug discovery, development, and manufacturing value chain for small-molecule new chemical entities (NCE) to global pharmaceutical innovator companies and biotechnology firms

Valuation and View

With a P/E (price-to-earnings) multiple of 138x, the valuation appears stretched compared to peers in the industry. Though the company has shown a  PAT margin growth from 0.72 percent in FY22 to 5.65 percent in FY24, with revenue and EBITDA growing at 29.8 percent and 53.4 percent CAGR but IPO’s premium valuation, some operational risks, limit its investment attractiveness despite growth potential in the global CRDMO market.

Investors are advised to avoid the IPO due and they should look for better entry points post-listing. We will keep a close watch on the IPO and its share price post-listing and update investors about any opportunities on time so stay with us.

MobiKwik IPO updates

The IPO of MobiKwik is receiving a robust response, by the end of day 2 of bidding, the public issue had been subscribed 20.41 times, the retail portion of the book build issue had been subscribed 64.65 times, the NII portion had been booked 30.07 times, and the QIB segment had been subscribed 84 percent.

The GMP of MobiKwik is at ₹136 in the grey market indicating close to 50% listing gain. For detailed review of MobiKwik IPO, click here