Sep 28, 2024 – The grey market premiums (GMP) of Forge Auto International’s initial public offering, which opened for subscription on September 26, have attracted great investor interest into its subscription rates as well. Of course, the IPO has been priced in a band of ₹102 to ₹108 per share to raise ₹31.10 crore through issuing 28.80 lakh shares.
The Forge Auto International IPO was subscribed 8.94 times on the second day of its subscription, thus indicating robust demand from various categories of investors. Among these, retail investors showed some hope, whose share was subscribed 11.64 times, followed by QIB at 7.40 times and NII at 4.68 times respectively. Robust subscription across all these tends to indicate high investor confidence in the future prospects of Forge Auto International.
The grey market, which often gauges sentiment ahead of an IPO, has been no less keen. While the GMP for Forge Auto International was initially mentioned at ₹20, highlighting a premium of 18.52% over the IPO price, interest in the grey market picked up fast, taking the GMP to ₹36 on the second day, signifying a 33.33% premium over the upper price band of ₹108. This movement indicates that market participants are expecting a good listing for Forge Auto International at an around ₹144 per share rate.
Market Sentiment and projections:
Subscription Rates: The retail as well as QIB high subscription rate reflects not only the strong company fundamentals but market’s thirst for quality engineering companies in the auto sector.
High interest with a rising market sentiment was indicated by the jump of GMP from ₹20 to ₹36 in one day. This could be due to the strategic positioning in the forging and manufacturing space that it serviced the critical sectors in auto as well as non-auto industries.
Implications for Investors:
The strong GMP and subscription rates could indicate that the shares might list at a premium, resulting in immediate gains for investors. To all potential investors, however, beware of the inherent risks involved with an IPO: high valuations and market volatility after listing.
