The grey market premium (GMP) is an unofficial and unregulated market where potential investors can buy and sell shares of an upcoming initial public offering (IPO) before they are officially listed on the stock exchange. The GMP is essentially the difference between the expected IPO price and the price at which shares are traded in the grey market.
In the case of Updater Services, a nil GMP ahead of the IPO opening suggests that, at that point in time, there was little to no premium in the grey market for shares of the company. This may indicate a lack of significant demand or enthusiasm among grey market participants for Updater Services shares before the IPO subscription opened. The Updater Services IPO. Here are some key points based on the information you provided:
IPO Details:
- Price Band: The price band for the Updater Services IPO is set at Rs 280-300 per share. This range represents the price at which investors can bid for shares during the IPO.
- Lot Size: Investors can bid for a minimum of 50 shares in one lot. Subsequent bids can be made in multiples of 50 shares.
- Fresh Equity Issue: The IPO includes a fresh equity issue of Rs 400 crore. This implies that the company is raising capital by issuing new shares to the public.
- Offer for Sale (OFS): In addition to the fresh equity issue, there is an offer for sale (OFS) component where existing shareholders, including promoters and other selling shareholders, will sell a total of 80 lakh shares. The proceeds from the OFS go to the selling shareholders and not to the company.
How the IPO Proceeds Will Be Utilized:
The net proceeds from the fresh issue (Rs 400 crore) will be utilized for the following purposes:
- Funding working capital requirements.
- Repayment of debt.
- Pursuing inorganic initiatives.
- Other general corporate purposes.
IPO Allocation:
- About 75 percent of the issue is reserved for Qualified Institutional Buyers (QIBs).
- 15 percent is reserved for Non-Institutional Investors (NIIs).
- The remaining 10 percent is allocated to Retail Investors.
Book-Running Lead Managers and Registrar:
- IIFL Securities, Motilal Oswal, and SBI Capital Markets are the book-running lead managers to the issue. These entities play a key role in managing the IPO process.
- Link Intime India is the registrar responsible for handling the IPO application and allotment process.
Anchor Placement:
- Prior to the IPO opening, Updater Services raised Rs 288 crore through the allotment of shares to anchor investors. This involves the allotment of shares to institutional investors before the IPO opens for subscription.
Offer for Sale (OFS):
- Promoter Offload: Promoter Tangi Facility will sell 40 lakh shares under the Offer for Sale (OFS).
- India Business Excellence Fund: The India Business Excellence Fund will also participate in the OFS by selling the remaining shares.
Fresh Equity Issue:
- The IPO comprises a fresh equity issue of Rs 400 crore. The net proceeds from this fresh issue will be utilized for several purposes:
- Funding working capital requirements.
- Repayment of debt.
- Pursuing inorganic initiatives.
- Other general corporate purposes.
Allocation:
- About 75 percent of the issue is reserved for Qualified Institutional Buyers (QIBs).
- 15 percent is reserved for Non-Institutional Investors (NIIs).
- The remaining 10 percent is allocated to Retail Investors.
Book-Running Lead Managers:
- IIFL Securities, Motilal Oswal, and SBI Capital Markets are the book-running lead managers to the issue. These entities play a crucial role in managing and promoting the IPO.
Registrar:
- Link Intime India is the registrar for the IPO. Registrars are responsible for handling the IPO application and allotment process.
IPO Price Band:
- The price band for the IPO is set at Rs 280-300 per share.
Lot Size:
- Investors can bid for a minimum of 50 shares in one lot, and subsequent bids can be made in multiples of 50 shares.
Utilization of IPO Proceeds:
- The net proceeds from the fresh equity issue will be used for various purposes, including strengthening working capital, debt repayment, strategic initiatives, and general corporate purposes.
