Grey market premia drop for listing candidates, hurt investors' sentiment

On Wednesday, grey market premia of CAMS and Chemcon fell about 15 per cent each to Rs 312 and Rs 320 from Rs 365 and Rs 360, respectively, on Tuesday.

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Broader market indices were faring worse than their headline peers as Nifty Smallcap slipped 2.03 per cent while Nifty Midcap dropped 1.63 per cent. Broadest index on NSE, Nifty 500 was down 1.50 per cent.
New Delhi: As Chemcon Speciality Chemicals and Computer Age Management Services (CAMS) gear up to debut on Dalal Street on Oct. 1, volatility in the broader market is impacting grey market premia ahead of their listing. Grey market premia of recent IPOs have been hammered down by the recent nervousness in the market, and this may bring down potential listing gains of the stocks.

On Wednesday, grey market premia of CAMS and Chemcon fell about 15 per cent each to Rs 312 and Rs 320 from Rs 365 and Rs 360, respectively, on Tuesday.

Dinesh Gupta of UnlistedZone said, "We expect decent listings for CAMS and Chemcon. The premia have mildly corrected from peaks, but these companies, with sound fundamentals, should be able to hold their ground."


Similarly, the euphoria for Mazagon Dock Shipbuilders is also fading out, as grey market premium on the unlisted shares of the company has slipped to Rs 125 from Rs 140. The premium for UTI AMC shares has dropped by half from Rs 42 to Rs 20.

The drop in grey market premia has made the dealers in the unlisted space alert. They are advising investors to be cautious before putting their money in stocks, even after listing.

Abhay Doshi, an independent dealer at Unlisted shares, said there is volatility in the broader market, which is hurting deals in the grey market. "If the market falls further, the sentiments may get worse."
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He said companies with poor fundamentals and weaker subscriptions are likely to be get impacted more, if the market turns weak.
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