Can Syrma SGS Tech's listing revive IPO Street? Here's what grey market signals

Ahead of its listing later in the week, shares of Syrma SGS Technology commanded a premium in the grey market.

Shares of Syrma SGS Technology were commanding a premium of Rs 45-50 in the grey market. The premium had risen to Rs 55-60 and as high as Rs 65 in the recent past. The premium in the unofficial market had kicked off from Rs 30.

According to market analysts, recent correction in the secondary market has dented prospects for the issue. Traders remain cautious over the primary market listing after a dull season a quarter ago.


Yash Gupta, Equity Research Associate, Angel One, said the steep correction in the last two sessions in the broader space has dented the sentiments. "However, we remain positive on the issue and one can expect a premium listing," he added.

"Retailers, who will get the allotment, are likely to reap modest gains from the issue as per the current trends,” he said.

The Rs 840-crore IPO of Syrma SGS Technology was sold in the range of Rs 209-220 per share apiece and received a strong investor response during the bidding process between August 12-18, as it was subscribed 32.61 times.

The quota reserved for qualified institutional buyers (QIBs) was subscribed 87.56 times while the portions reserved for non-institutional investors (NIIs) and retailers were subscribed 17.5 times and 5.53 times, respectively.
]Abhay Doshi, co-founder, UnlistedArena said that despite being moderately priced, Syrma SGS Technology received a strong response from investors, which makes it a strong contender for decent listing gains.

"If the broader market conditions improve in the next 2-3 sessions, one can expect returns in higher teens or even more which will be a big positive for both investors and primary market prospects," Doshi said

Incorporated in 2004, Syrma SGS Technology is a Chennai-based engineering and design company engaged in electronics manufacturing services.

Another issue, DreamFolks Services, which will open for subscription on Wednesday, August 24, is commanding a premium of Rs 50-55 in the unofficial market compared to its price band of Rs 308-326 apiece.

Doshi said that DreamFolk's business has strong growth prospects but the issue is aggressively priced. "However, being a platform business, it would remain in fancy among the investors,” he said.


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