The Ahmedabad IPO grey market is booming. Shares worth crores are traded each day and increasing number of speculators are getting involved. According to a recent report by the Times of India, even executives from foreign institutional investors and portfolio managers are now tracking the grey market rates and using it as an indicator of the price at which a particular stock will list.

Here is a list of premiums being offered for some recent IPOs:

Akruti Nirman Ltd - Premium Rs 180
Cinemax India Ltd - Premium Rs 40.
Firstsource - Premium Rs 20
Global Broadcast News Ltd - Premium Rs 190
Idea - Premium Rs 20
PFC - Premium Rs 26
Redington India - Premium Rs 25
Technocraft - Premium Rs 17

These prices change each day and in many cases, listing prices are nowhere near the grey market prices.

Info Edge grey market price was much lower. The listing was around Rs 520, but grey market rates were in the 400s.

Similarly Cairn India had a positive premium in first days of its IPOs but the premium turned into a discount as the IPO closed.

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Whats the current grey market rates for MindTree? I'm expecting 800+

As per the information I have the premium is 250 Rs - that means an expected listing of 675+.

However the premium may change depending on the subscription levels.

Irrespective of the premium, I would suggest investors to subscribe to this issue. Mindtree is one of the leading IT services companies in India and has a bright future. It became the fastest Indian company to cross 100 million dollars in revenues. The company took only 7 years for this achievement - from 1999 to 2006.

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Hi Alchemist,

i am an avid investor from last 2 years and my persistent search for quality blogs got me here. I really liked the posts & the replies posted here. Let me admit that it is a great educator for many novice investors.

I track the ipo's and prefer primary market investment. Quite often we hear the term "Ahmedabad IPO grey market". I read your definition but i would be pleased if you can throw more light on to it or let me know any other resource from where i can learn more about "Ahmedabad IPO grey market premiums".

Can we have a regular post on the grey mkt premium values of the running IPO's?

Also can you share from where do you get the "Premium values" for the running ipo's?


Thank you,
Nishant

Parallel markets have always coexisted with stock markets.

The western world had once had very popular "bucket shops", which were very similar to our "dabba trading".

Before derivatives arrived, "badla trading" was very popular in Mumbai markets.

Ahmedabad IPO grey market is just a parallel market for IPOs. It is nothing complex - just a market of speculators, speculating on listing prices for IPOs. There is an intermediary, who is responsible for making sure that all trades are honored.


Grey markets are usually accurate about listing prices for IPOs, but sometimes they may go wrong.

Cairn Energy actually had a premium, just before its IPO opened. However many institutions withdrew their applications on the last day and the grey market prices crashed.

Infoedge India listed at a much higher price, than what it was being traded for, in the grey markets.

The last day of any IPO is very crucial. The response on the last day determines the listing price for the stock. I always advise people to wait till the last day. One can fill up the form, but the submission should be held back, if one is not sure about an IPO.

I always check the oversubscription figures at 2:30 pm on final day of IPOs before submitting the form.

(ICICIDirect closes IPOs at 1 PM and so this is not applicable to users of ICICIDirect).

NSE’s site www.nseindia.com updates over-subscription figures every hour during market hours.

As such, there is no official site for grey market premiums of IPOs. However if a person had good contacts, he can get updated prices regularly.

The current grey market premiumss for some of the IPOs are:

Forthcoming-
Simplex - Rs 140

Ongoing-
Everonn- Rs 400

Closed-
Allied Digital- Rs 130
Celestial Lab- Rs 10
Spice- Rs 11
HDIL- Rs 27

One more thing I would like to add:

There is lot of noise about grey markets premiums. An investor should not lose a focus because of it. It is not important where a stock lists. The more important thing is where the stock will go in the long term. Playing for listing gains is a short term strategy. That’s the reason I avoid daily updating premiums.

Still from now onwards, I will update, if there is any drastic change in grey market prices.

However serious money is only made by those who play for the long term. You will find many millionaire investors. It is rare to find a millionaire trader.

I really regret selling off my original IPO shares like Maruti and Infoedge; and I am really happy that I held on to stocks like Tech Mahindra, when everyone was screaming “sell” just because they were trading much higher than their grey market prices.

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hello Alchemist,

Thank u very much creating such a useful thread

Recently I have applied for

HDIL (56 shares)
BEML(10 shares)
Allied digital services limited(350 shares)

On getting allotment, what should be my strategy for these stocks. Should I hold, sell or book partial profits.

Also, I would like to know about Omaxe and Central Bank of India ipos.


Regards,
visu

I would sell HDIL and BEML.

I would sell HDIL because I don't understand real estate valuations and I don't invest in businesses that I don't understand. . Real Estate sector will definitely do well in years to come, but at this moment I think a correction in real estate prices is imminent. I would wait for a correction and invest in sector leaders like DLF and Unitech for the long term.

I would sell BEML because I feel it is a bit overvalued and I don't see much growth for it in next 12-18 months. I have a thread about BEML here.

I haven't looked at Allied Digital Services. I will let you know later.

I have made a thread for Omaxe IPO here.

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thanks for ur valuable feedback.

If you have got allotment for Allied Digital Services, selling partially would be the best strategy.

Check out this post about Allied Digital Services.

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Please post thread on CBI IPO.

Can i receive email every day on latest grey market prices of IPOs on my email address ! apharkya@gmail.com

It is difficult to email everybody. This site does not have its own servers and there is a limit to how many emails the site can send.

If you are subscribed to the thread, you will receive an email every time the thread is updated.

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