Zomato IPO GMP, Grey Market Premium & Kostak Rates Today (2024)

FAQs

What was the GMP of Zomato IPO? ›

Zomato was listed on the stock exchange on 23-07-2021. The IPO was subscribed 38.25x. The last GMP for Zomato IPO was ₹22, updated on Jul 23rd 2021 09:07 AM. As per the last GMP, the expected profit/loss for the IPO was 28.95%.

Determine the GMP: To determine the GMP, subtract the issue price from the grey market price. For example, if the issue price is Rs. 100 per share and the grey market price is Rs. 102 per share, the GMP would be Rs.

GMP is the price an investor is willing to pay above the IPO issue price in the IPO grey market. The listing price is the opening price of the shares on its first day of trading. GMP is a term used in the IPO grey market/unregulated markets.

The GMP of IPO is influenced by a number of factors, including: Demand and Supply: If there is high demand for an IPO, the GMP of IPO will likely be higher. This is because investors are willing to pay a premium for shares that they believe are undervalued or have the potential to appreciate in value.

For example, in the IPO of food delivery giant Zomato, price range was Rs 72 - Rs 76. Cutoff price is the maximum issue price. In case of Zomato, Rs 76 was the cutoff price and individuals received shares at this price.

Here is an example-

And the grey market premium is Rs. 300. This means that investors are ready to purchase the shares of Company Y for Rs. 400 (100+300). Note: The grey market premium of an IPO depends on its demand.

The Kostak rate in the IPO grey market is the fixed rate or price at which IPO applications are sold and bought regardless of their allotment status . The Grey market premium Kostak rate is set by the mutual understanding of the seller and the buyer. The Kostak rate is the price for the entire lot or IPO application.

How to calculate grey market price? ›

The GMP is based on the subscription level, demand and supply of IPO shares in conjunction with market sentiment. There is no set method or formula for calculating the IPO grey market premium. In general, the grey market premium is higher when IPO demand is high and lower when IPO demand is lower.

The gray market refers to products that are sold legally, but outside of the brand's permission. These products can harm relationships with distributors and damage product reputation. Common gray market goods include cameras, cars, watches, and even pharmaceuticals.

Grey market goods are goods sold outside the authorized distribution channels by entities which may have no relationship with the producer of the goods. This form of parallel import frequently occurs when the price of an item is significantly higher in one country than another.

Disadvantages of GMP contracts

Without a trusted partner, owners may worry that the GC is inflating costs or trying to cut corners to increase their profit, resulting in lower-quality work. The GC must provide detailed documentation of costs throughout the project and to receive compensation.

If the IPO issue price is Rs 150 and the GMP is Rs 80, the grey market buyer is willing to pay Rs 230 per share to the seller of the IPO shares. However, if the seller does not receive any shares at the allotment, the deal is cancelled. IPO applications are traded at Kostak Rate or Subject to Sauda price.

Grey market premium or GMP is a premium amount paid at which initial public offering (IPO) shares are traded before it is listed on the stock exchanges. For instance, LIC fixes its IPO price at Rs 90 per share and its IPO GMP is 50, then the organisation will get listed at Rs 140.90.

Dilution In The Share Ownership

Zomato, through both the fresh issue of shares and the OFS component of the issue, is likely to witness a stake dilution. However, the dilution is likely to be only around 10% to 15%, despite selling shares worth Rs. 7,875 crores to the public.

The enhanced offer size is about Rs 9,375 crore. Interestingly Zomato's valuation at IPO, at about Rs 60,000 crore, is equivalent to the market value of all the quick service restaurants (QSRs) listed on Indian bourses.

The last GMP for Paytm IPO was ₹-30, updated on Nov 18th 2021 07:59 AM. As per the last GMP, the expected profit/loss for the IPO was -1.40%. The issue price of Paytm IPO (PAYTM,543396) was ₹2150, listed at a price of ₹1950.00, which is -9.30% lower than the allotment price.