Gray market gives boost as Street prepares to welcome first listing in nearly 3 months


Syrma SGS Tech IPO: Dealers claim that the company has commanded a gray market premium (GMP) of Rs 15-65 in the past few days.

Syrma SGS Technology – a Chennai-based engineering and design company that provides solutions to original equipment manufacturers – is set to give Dalal Street its first listing in nearly three months. Market participants are hoping for a decent secondary market debut for Syrma, reflected in the trend of the gray market – an unofficial market for unlisted securities.

Dealers say Syrma SGS Tech has commanded a gray market premium (GMP) as high as Rs 65 in the recent past, fueling demand hopes for the globally listed stock.

Date GMP
August 22 Rs 65
20 August Rs 60
August 19 Rs45
August 18 Rs 35
August 17 Rs 25
August 16 Rs 25
August 15th Rs 25
August 13 Rs 15
August 12 Rs 15
August 11 Rs 20
August 10 Rs 25
August 9 Rs 20
August 8 Rs 28

Source: IPO Watch

“The Indian primary market is expected to restart on a positive note after a pause with the listing of Syrma SGS, whose IPO was moderately to fully priced,” Abhay Doshi, co-founder of Unlisted Arena – a portal that tracks gray markets and transactions in unlisted securities – said

“The decent subscription numbers should help Syrma SGS sign up at a premium of 20-25% if general market conditions are stable,” Doshi added.

The IPO – the first to hit the streets in 11 weeks – was a combination of a new share issue and a sale offer by existing shareholders.

Syrma can be expected to list at a premium of Rs 56 over the issue price, said Dinesh Gupta, co-founder of UnlistedZone, another company that trades unlisted shares.

Syrma SGS stock is expected to list on the BSE and NSE on Friday August 26th.

The initial sale of the company’s shares was well received by various categories of investors.

Category Subscription (Number of times the shares offered)
Qualified Institutional Buyers 87.6
Non-institutional investors 17.5
Detail 5.5

Prospective investors could bid for Syrma SGS in the range of Rs 209 to 220 per share in multiples of 68, making a lot worth Rs 14,212 to 14,960.

Syrma SGS Technology aims to use the proceeds of the IPO to fund its investments and working capital requirements, as well as for general corporate purposes.


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