What GMP signals after two days of subscription

Adani Wilmar IPO (initial public offering) opened for subscription on 27th January 2022 and after two days of bidding, Adani Wilmar IPO subscription status says that the public issue has been subscribed 1.13 times. After two days of bidding, retail portion of the public offer worth 3,600 crore has been subscribed 1.85 times. As per the market observers, shares of Adani Wilmar is available at a premium of 40 in grey market today.

Adani Wilmar IPO GMP

Market observers said that Adani Wilmar IPO GMP today is 40, which is 5 lower from is yesterday’s grey market premium of 45. They said that after two days of bidding, grey market and subscription status suggests that despite negative market sentiments, Adani Wilmar IPO GMP has remain steady at around 40 to 45 for last 3 days, which is good for the IPO. They said that Adani Wilmar shares made its debut at around 65 in the grey market that means it may list at around 65 premium in bulls’ case while in bears’ case it may give around 40 premium to its bidders.

What this GMP mean?

According to market observers, grey market premium is an estimated view about the listing gain one can expect from a particular public issue. However it is completely non-regulated unofficial data, which is nothing to do with the balance sheet of the company. As Adani Wilmar IPO GMP today is 40, it means grey market is expecting Adani Wilmar share listing at around 270 ( 230 + 40), which is around 177 per cent higher from its price band of 218 to 230 per equity share.

However, stock market experts maintained that GMP is not a concrete data to find out whether a public issue is strong or weak. One should look at the financials of the company as it reflects actual financial condition and important fundamentals that reflects clear picture of the company.

Advising investors to subscribe Adani Wilmar IPO; Aprajita Saxena, Research Analyst at Trustline Securities said, “Company enjoys a leadership position in branded edible oil and packaged food business. Strong brand recall and broad customer reach coupled with a diversified products portfolio with market leading brands. Company is largest oleo-chemical manufacturers in India with pan India network and robust distribution infrastructure. Demographic change, increase in e-commerce reach, increasing household consumption and supportive government policies are the strong tailwinds for the FMCG company. Therefore, sentiments are positive on this edible oil stock.”

Anuj Jain – Research Head, Co-founder – Green Portfolio Pvt Ltd said, “The company commands 18.3 per cent market share in edible oil. At Mcap to sales of less than 1 and PE of around 36 at issue price, Adani Wilmar Ltd is a clear Buy with a suggestion to hold it for long term. As the Food and Industry Essential business will grow (where AWL has ambitious plans), the PE re-rating is imminent.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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