Leading integrated metal company Shyam Metalics and Energy shares traded at around 50 percent premium in the grey market ahead of its listing scheduled for next week.
The Rs 909-crore public issue closed on June 17 after being subscribed 121.43 times, the fourth highest subscription levels seen in 2021 after MTAR Technologies, Nazara Technologies and Easy Trip Planners.
The offer comprising a fresh issue of Rs 657 crore and an offer for sale of Rs 252 crore opened for subscription on June 14 with a price band at Rs 303-306 per equity share.
Shyam Metalics shares were available at a premium of Rs 150-160 (on the higher end of the price band of Rs 306) in the grey market, as per the information available on IPO Watch and IPO Central. That comes to a 49-52 percent hike compared to issue price.
Generally, the grey market price indicates that the stock could list at around this price.
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The grey market is an unofficial platform and the trading in grey market takes place from the announcement of issue price till the listing of shares.
"We believe that the interest has been strong on account of sectoral tailwinds led by global demand recovery and limited capacity additions due to goal of achieving carbon neutrality. Indian prices are still below import prices and lower exports from China, with exports rebates being discontinued, would open opportunities," said Milan Desai, Lead Equity Analyst at Angel Broking.
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He further said, "Demand scenario domestically is also likely to improve and thus leading to capacity additions by steel companies. Shyam Metalics, too is in midst of doubling its capacity and is the least leveraged among peers, where larger peers are on a deleveraging drive."
"Valuations were not very commanding which may also have resulted in strong oversubscription numbers," he added. The trading in shares will commence from around June 24.
Shyam Metalics and Energy is a leading integrated metal producing company focusing on long steel products and ferro alloys with the ability to sell intermediate and final products across the steel value chain.
The company has a diversified product mix such as, iron pellets, sponge iron, steel billets, TMT, structural products, wire rods, and ferro alloys. It is expected to double its current aggregate installed metal capacity from 5.71 MTPA, as of December 2020, to 11.60 MTPA by FY25.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.