There has been huge rush for Reliance Power IPO after looking at its pre IPO response.
The IPO price band is between Rs 405-450 per share and lot size is 15 shares and in multiples thereof.
It will open on January 15 and close on January 18, 2008. The company is entering capital market with a public issue of 26 crore equity shares. Net issue to the public will be 22.8 crore shares. The company is going to raise more than Rs 10,000 crore from this IPO.
There are 2.28 crore shares available in the NII category, which is 10% of the total shares available in the IPO.
Comment:
This is the first IPO from Anil Dhirubhai Ambani Group and experts say that at least 100 times subscription is likely in Non Institutional Investors category.
The grey market premium (GMP) for the Reliane Power IPO is around Rs 390-400.
(Ref: NDTV Profit & MoneyControl.com)
Notes:
A strong word of caution for those who do WANT to understand the details!
GMP or Grey market premiums are what traders or other investors offer you for your alloted shares in an IPO off the market.
For example, If you apply for Reliance Power for 150 shares @ Rs. 450 each, and are alloted 15 shares.
Then you may offer these shares to a grey market trader for a GMP of say 400 Rs, i.e, you actually sell him your shares for 850 Rs, before it has even listed.
So you are assured of 400*15= 6000 Rs profit.
Now its the traders responsibility to make profit over that, if the share lists at 1000, then the trader makes in 150/- Rs per share as his profit, and the IPO investor is at a loss. But if the share lists at 800 Rs, then the trader incurs a loss of 50/- Rs/share, but you get fixed 850/- Rs per share.
Investor could consider grey market premium as one of the parameter before applying for IPO Stocks. Please note that good grey market premium doesn't guarantee for listing gain or long term gains. Grey market premiums may change in the duration when you apply for an IPO and when the issue gets listed.
An IPO investor should consider various factors before applying in an IPO including company financials, business model, promoters, Issue size, upcoming projects or investment plans etc
For more info - check out this GMP FAQ
The IPO price band is between Rs 405-450 per share and lot size is 15 shares and in multiples thereof.
It will open on January 15 and close on January 18, 2008. The company is entering capital market with a public issue of 26 crore equity shares. Net issue to the public will be 22.8 crore shares. The company is going to raise more than Rs 10,000 crore from this IPO.
There are 2.28 crore shares available in the NII category, which is 10% of the total shares available in the IPO.
Comment:
This is the first IPO from Anil Dhirubhai Ambani Group and experts say that at least 100 times subscription is likely in Non Institutional Investors category.
The grey market premium (GMP) for the Reliane Power IPO is around Rs 390-400.
(Ref: NDTV Profit & MoneyControl.com)
Notes:
A strong word of caution for those who do WANT to understand the details!
GMP or Grey market premiums are what traders or other investors offer you for your alloted shares in an IPO off the market.
For example, If you apply for Reliance Power for 150 shares @ Rs. 450 each, and are alloted 15 shares.
Then you may offer these shares to a grey market trader for a GMP of say 400 Rs, i.e, you actually sell him your shares for 850 Rs, before it has even listed.
So you are assured of 400*15= 6000 Rs profit.
Now its the traders responsibility to make profit over that, if the share lists at 1000, then the trader makes in 150/- Rs per share as his profit, and the IPO investor is at a loss. But if the share lists at 800 Rs, then the trader incurs a loss of 50/- Rs/share, but you get fixed 850/- Rs per share.
Investor could consider grey market premium as one of the parameter before applying for IPO Stocks. Please note that good grey market premium doesn't guarantee for listing gain or long term gains. Grey market premiums may change in the duration when you apply for an IPO and when the issue gets listed.
An IPO investor should consider various factors before applying in an IPO including company financials, business model, promoters, Issue size, upcoming projects or investment plans etc
For more info - check out this GMP FAQ
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