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What GMP signals as subscription opens today

Sansera Engineering IPO (initial public offering) has opened for subscription on Tuesday and the three-day public issue will conclude on 16th September 2021. Promoters of the company have fixed price band of the public issue at 734 to 744 and market experts are of the opinion that company’s financials are quite strong. 

As of 3 pm, Sansera Engineering IPO has been subscribed 0.43 times with retail category booked 0.68 times while non-institutional investors and QIBs have subscribed 0.04 times and 0.69 times respectively, BSE data showed.

Sansera shares are available at a premium (GMP) of 83 in the grey market today. Ever since Sansera Engineering shares became available for trade in the grey market, it remained in the range of 70 to 85 that is expected to change after opening of subscription today, as per market observers.

Sansera Engineering IPO GMP

As per the market observers, Sansera Engineering shares became available for trade at a premium of 60 in the grey market last week and after that it has scaled up to 83. They said that for the last three days, Sansera Engineering IPO grey market premium has remained in the range of 70 to 85, which may change in upcoming days as subscription has opened today. They added that much will depend on the response of the bidders to the IPO.

What this GMP means

Market observers went on to add that grey market premium is nothing but listing gain expected in the grey market. Since, Sansera Engineering IPO GMP today is 83, it simply means that grey market is expecting this IPO’s listing at around 827 ( 744 + 83) — around 11 per cent higher from its issue price of 734 to 744 per equity share.

However, market observers maintained that its financials that matters most. So, one should look at the financials of the company first before looking at other indicators of the IPO.

Speaking on the financials of Sansera Engineering; Saurabh Joshi, Research Analyst at Marwadi Shares and Finance Limited said, “Considering the FY-21 adjusted EPS of 21.02 on post-issue basis, the company is going to list at a P/E ratio of 35.40 with a market cap of 38,225 mn while its peers namely Endurance Technologies and Minda Industries are trading at a P/E of 33.56 and 56.63 respectively. We assign subscribe rating to this IPO as the company is a leading supplier of precision engineered components that are gaining market share across automotive and non-automotive sectors and is available at reasonable valuation as compared to its peers.”

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