Grey market trends suggest the stock indeed may see decent listing gains, but that may not be enough for it to replicate Nureca’s performance in debut trade.
Marketmen tracking grey market trends said Nureca’s strong listing might not have any major impact on RailTel’s debut, but the recent improvement in the secondary market sentiment would.
They said Nureca’s was a small Rs 100 crore IPO and had, thus, witnessed huge demand. In comparison, RailTel was a large Rs 819 crore issue. The railway firm has reported single-digit sales and profit growth for the past couple of years, while Nureca logged solid growth for the same period.
Umesh Chandra Paliwal, Co-Founder at UnlistedZone, said Nureca shares are largely quoting a Rs 15-20 premium in the grey market. “The company mainly serves railways and other PSUs and given the government’s privatisation push, there are concerns that competition may rise for the company in the future. Single digital growth is uninspiring, and so is a heavy reliance on PSUs.”
That said, the company is debt-free and a consistent dividend payer, he said.
Abhay Doshi, a Gujarat-based dealer of unlisted shares, who also tracks grey market, noted that the stock was commanding a grey market premium of Rs 18-19 now compared with Rs 12-14 a few days ago.
A Rs 19 premium over the issue price of Rs 94 per share suggests a 20 per cent potential upside at listing. “The sentiment has changed as the market rallied in the last two days,” Doshi, Founder, UnlistedArena.com.
The IPO that was sold from February 16 to 18 saw qualified institutional buyers (QIBs) subscribe to 65.14 times the quota limit. Non-institutional investors bade for 73.25 times the quote and retail individual investors (RIIs) 16.78 times the quota limit.
