The recently concluded listing of Sansera Engineering and the forthcoming issue of Paras Defence and Space Technologies are commanding a strong premium in the grey market, thanks to the record-breaking market rally.
Paras Defence and Space Technologies has a steep premium of Rs 200 per share, which is 115-120 per cent over its issue price of Rs 165-175. The grey market is euphoric, say brokers, because of the company’s prospects after the recent strong listing, the government’s defence push and fundamental strength.
Abhay Doshi, co-founder, UnlistedArena, said the company’s issue size was very small and that left something on the table for bidders. “The PLI (Production-Linked Incentive) scheme of the government and new norms on drone technology are boosting the sentiments of the company,” he added. “Paras Defence has a strong product line and its clients are secure and stable.”
Navi Mumbai-based Paras Defence and Space Technologies’ Rs 170.78 crore IPO will be open for subscription on September 21-23. “Having the capability of serving space and defence technology, along with a strong client base like the government of India and various government organisations, gives the company a huge growth potential,” said Kaushlendra Singh Sengar, Founder & CEO at INVEST19.
Sansera Engineering, on its part, is commanding a premium of Rs 35-40 apiece, which was almost zero previous week, after the issue closed for subscription on Thursday.
Narottam Dharawat of Mumbai-based Dharawat Securities said the company had posted stable growth in profits and the product line was quite attractive, thanks to the EV push. “Investors shunned the issue of Sona Comstar but the company rewarded its investors handsomely,” Dharawat said. “Sansera may repeat this story after listing.”
The issue of Sansera Engineering was subscribed 11.47 times, thanks to strong response from institutional and HNI investors. However, retail and employee quotes received a muted response.
Expecting a listing premium wouldn’t be wrong going by the grey market movement, said Sengar of INVEST19. “There is higher growth potential in the industry,” he added.
Doshi said the euphoria in the grey market may fizzle down and premium may decline if the secondary market starts to correct from its lifetime peaks.
