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What GMP signals when all eyes are on the allocation date

ASG Transact Tech IPO: Worth bidding for public issue 680 closed yesterday and now all eyes are on ASG Transact Technologies’ IPO, which is expected to take place on January 27, 2022. According to ASG Transact Technologies’ IPO subscription status, the book edition was subscribed 7.79 times while its retail portion was subscribed 3.08 times. According to market watchers, ASG Transact Technologies shares are available at a premium of 15 today in the gray market. They said that after the strong reaction to the public offering on the second and third days, ASG Transact Technologies’ IPO gray market (GMP) premium nearly doubled 8 to 15 in just one day.

ASG Transact Technologies IPO GMP

According to stock market experts, ASG Transact Technologies is now GMP 15, that is 5 higher from its gray market premium yesterday 10. Market watchers added that ASG Transact Technologies’ IPO gray market price almost doubled in one day after investors reacted strongly to this public offering on the second and third bidding days. The public issue, which is 100 percent available for purchase, was subscribed 7.79 times, which was well received in the gray market. They said much will depend on market sentiment as the gray market price has risen despite the sharp sell-off in the secondary market over the past four sessions. They said that if there is a trend reversal over the next week, ASG Transact Technologies’ IPO could scale further north and make up lost ground since it made its gray market debut 23

What does this GMP mean?

Market observers added that the gray market premium is nothing more than an unofficial estimate by gray market players of the expected listing premium from the issue. As ASG, Transact Technologies is now IPO GMP 15, it means that the gray market expects ASG Transact Technologies shares to be listed at around 190 ( 175 + 15), which is roughly 8.50 percent higher from ASG Transact Technologies’ IPO price band 166 to 175 per share.

However, aftermarket experts claimed that GMP is not a proper variable to find out whether a public offering will be successful or not. They said the company’s balance sheet is important and advised investors to stick to basics.

highlighting fundamentals related to the IPO of ASG Transact Technologies; Abhay Doshi, Founder of UnlistedArena.com, said: “AGS Transact Technologies is an omnichannel payment solutions provider with a diversified portfolio of payment and automation solutions. The pandemic has impacted the business due to the slowdown in economic activity, resulting in a lack of growth at the top as well as the company’s bottom line. The issue is valued at a PE multiple of 38 based on FY21 earnings and has a loss of around 18 crores in 5MFY22. Due to these factors, the IPO could receive a moderate response. However, revenue from digital solutions will be a key factor to consider in order to move forward.”

Disclaimer: The views and recommendations made above are those of individual analysts or brokerage firms and not Mint.

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