IRM Energy IPO grey market premium corrects amid D-St selloff; here's what to expect

Shares of IRM Energy are losing their steam in the grey market, thanks to the panic selloff in the broader markets, ahead of its listing. The company, which is likely to debut at the bourses on Thursday, October 26, is seeing a steep correction in the grey market and is headed for the flat listing at Dalal Street.

Last heard, IRM Energy was commanding a premium of Rs 25-30 per share in the unofficial market, signaling a listing pop of 5-6 per cent to the investors over the issue price of Rs 505 apiece. However, the grey market premium held firm around Rs 90 October 11, which came down to Rs 50 on October 20, when the issue was closed for bidding.

Analysts are positive on the stock but expect a mild listing pop at the debut. However, they believe that the issue is well-poised to deliver strong performance in the long run and investors can consider to hold the stock in their portfolios, if they have received the allotment.

Anushi Vakharia, Research Analyst at StoxBox expects the company to have a decent listing when it lists on the bourses tomorrow. "We expect the company to open at a premium of around 10% to its issue price of Rs. 505 per share due to healthy volume growth recorded over the last three years," she said.

Favourable regulations supporting the increased adoption of PNG and the business effectively expanding its presence in newer geographical areas through a higher focus on technology adds to confidence, Vakharia added. "Thus, we advise investors who have received allotment to remain invested in the company from a long-term perspective."

The IPO of IRM Energy was open for bidding between October 18-20. The company sold its shares in the range of Rs 480-505 with a lot size of 29 equity shares. The Cadila Pharmaceuticals-backed company raised a total of Rs 545.40 crore by offering 1.08 crore shares through a fresh share sale.

The issue was overall subscribed 27.05 times. The quota for qualified institutional bidders (QIBs) was booked 44.73 times, while the portion for non-institutional buyers (NIIs) was booked 48.34 times. The portion for retail investors was booked 9.29 times, while employees' allocations was subscribed only 2.05 times

IRM Energy is poised to make its stock market debut soon and the IPO received a good response from investors, oversubscribing by 27 times, said Shivani Nyati, Head of Wealth at Swastika Investmart.

"While IRM Energy is still an early-stage company, it has a diversified customer portfolio, distribution network, and strong customer relationships. Additionally, the IPO was priced fairly. Therefore, even in the current market conditions, the IPO is likely to generate decent listing gains," she said.


 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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