Rolex Rings IPO: Shares trade at 50% premium in grey market ahead of listing

]

live bse live

nse live Volume Todays L/H More ×

Forging company Rolex Rings shares continued to witness strong demand from investors in the grey market as it traded at a healthy 50 percent premium over its final issue price ahead of listing next week.

On IPO Watch and IPO Central data, which tracks grey market premium of issues prior to the listing, the shares of the automotive components manufacturer were trading at a premium of Rs 450. This equates to a trading price of Rs 1,350, a premium of 50 percent over the issue price of Rs 900.

Also read - Nuvoco Vistas Corporation mops up Rs 1,500 crore from anchor investors ahead of IPO

Rolex Rings will debut on both BSE and NSE on August 9. It received a strong response to its IPO as it was subscribed 130.44 times during July 28-30. This is one of the reasons for the strong grey market premium.

“Rolex Rings IPO has received strong investors response and indicating premium listing according to the grey market premium. The mood of the primary market depends on the sentiment of the secondary market too. Indian markets inching to new highs is keeping the momentum in the primary market upbeat,” said Likhita Chepa, Senior Research Analyst at CapitalVia Global Research.

Also read - CarTrade Tech mobilises Rs 900 crore from anchor investors ahead of IPO

The company raised Rs 731 crore from its public offering that comprised a fresh issue of Rs 56 crore and an offer for sale of 675 crore by Rivendell PE LLC. The net proceeds from the fresh issue will be utilised for working capital requirements.

To Know All IPO Related News, Click Here

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.

Rolex Rings IPO: What GMP is signaling about the public issue

]

Rolex Rings IPO: ₹731 crore public issue got subscribed more than 130 times of the offer and now all eye are set on the finalisation of share allotment process. However, those who bid for the initial offer are keeping an eye on the grey market premium (GMP) of the IPO as well. As per the market observers, Rolex Rings IPO GMP today is ₹480 — ₹30 up from its Wednesday grey market premium. Observers said that after the closure of an IPO, some dip in the grey market premium is expected, but Rolex Rings IPO GMP has not lost much that reflects strong listing of the company shares at Indian bourses.

Rolex Rings share price in grey market today

Rolex Rings IPO GMP today is ₹480, which is ₹30 higher from its Wednesday premium of ₹450. This means, grey market is expecting Rolex Rings share listing at the price of ₹1380 ( ₹900 + ₹480) — around 53 per cent higher from the issue price of ₹880 to ₹900 per equity share. So, Rolex Rings share price in grey market today is ₹1380 per equity share.

What this GMP mean

According to the market observers, after closure of the bidding, Rolex Rings IPO GMP came down from its high range of ₹525-550 to ₹420 and once again it is peaking up once the share allotment process begun. Since, listing is linked to the market mood too, this loss in Rolex Rings IPO GMP should be seen with this specs too as market was under pressure at that time. They went on to add that Rolex Rings GMP range of ₹420 to 480 post-closure of bidding reflects that the least premium that one can expect from this IPO would be in this range.

However, if we go by the stock market experts, they are also bullish on Rolex Ring share listing as they found its financials promising.

Saurabh Joshi, Research Analyst at Marwadi Shares and Finance said, “Considering the FY-21 adjusted EPS (Earnings Per Share) of ₹31.93 on a post-issue basis, the company is going to list at a P/E of 28.19 with a market cap of ₹2,451 crore, while its peers namely Ramkrishna Forgings and MM Forgings are trading at a P/E of 123.30 and 37.14 respectively.” Saurabh Joshi went on to add that the company is one of the leading forging manufacturers with a geographically diversified revenue base and it is available at reasonable valuation as compared to its peers.

Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.

Rolex Rings IPO: What GMP signaling on last date of subscription

]

Rolex Rings IPO: ₹731 crore public issue of Rolex Rings got subscribed 9.26 times by first two days of bidding and there is still one full day left for bidders to apply for the initial public offer. Keeping an eye on the overwhelming response from the bidders, grey market is also giving positive response to the Rolex Rings shares. According to market observers, Rolex Rings IPO GMP today is ₹555, which is ₹55 up from its yesterday’s grey market share price.

The market observers said that Rolex Rings IPO grey market price has been rising since its subscription got opened on 28th July 2021. They said that in the last three days, Rolex Rings IPO grey market premium has jumped from ₹450 levels to ₹555 that means market is expecting listing gains from the IPO to the tune of near 50 to 60 per cent. They went on to add that today is the last date of bidding for Rolex Rings IPO and those who were in wait and watch, may come forward to bid for the IPO as the stock has remained strong in the grey market on first two days of bidding.

What rise in Rolex Rings IPO GMP means

As per the market observers, Rolex Rings IPO grey market premium today is ₹555, which is ₹55 higher from its share price in the grey market on Thursday. They said that in the last three days, Rolex Rings IPO GMP has been rising that means market is bullish about the public issue. They said that ₹555 GMP of Rolex Rings IPO simply means market is expecting Rolex Rings IPO listing at ₹1455 ( ₹900 + ₹555) — means expected listing premium in the grey market for the IPO is around 60 per cent.

So, those bidders who look at the grey market premium before going into the financials of the company may get attracted by this Rolex Rings GMP. Hence, surprising response from the bidders is expected as subscription is open for today only, said market observers.

Speaking on the financials in regard to Rolex rings IPO; Abhay Doshi, Founder at UnlistedArena.com said, “Rolex Rings is one of the top five forging companies in India in terms of installed capacity and a manufacturer and global supplier of hot rolled forged and machined bearing rings, and automotive components.

At the price of ₹900 the asking PE comes at the multiple of 24. High sentiment in primary markets may emanate in listing gains but for long term it would be worthy to watch for future performance and take any decision.”

Standing in sync with Abhay Doshi’s views; Saurabh Joshi, Research Analyst at Marwadi Shares and Finance said, “We assign a subscribe (With Caution) rating to this IPO as the company is one of the leading forging manufacturers with a geographically diversified revenue base and is available at reasonable valuation as compared to its peers.”

Rolex Rings IPO details

Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.