| A day ahead of its listing, DLF shares were trading at a premium of Rs 50-70 per share in the Rajkot grey market.
|
| |
| Traders said it is unusual that the grey market is active even after the issue subscription has closed. DLF grey-market shares were priced at Rs 525 per share.
|
| |
| Traders said the premium reached its peak in the grey market since the sentiment in the secondary market is robust and the stock prices of real estate companies are rising.
|
| |
| Traders said this indicated a good premium for DLF shares when it lists tomorrow.
|
| |
| The grey market was also quite active for Vishal Retail shares, which was listed today at a hefty premium. The scrip was commanding a price of Rs 350 in the grey market till yesterday, compared to its issue price of Rs 270. The scrip closed at Rs 750 on listing day.
|
| |
| In the case of Everonn Systems, whose issue opens tomorrow, the premium in the grey market is Rs 300, against a price band of Rs 125-140.
|
| |
| The Allied Digital Services scrip is commanding a premium of Rs 100-110 against a price band of Rs 170-190 per share. The issue, which closes tomorrow, is already subscribed more than three times.
|
| |
| There is more. The Housing Development Infrastructure Ltd (HDIL) scrip commanded a premium of Rs 30-35 against a price band of Rs 430-500.
|
| |
| The grey market is an unofficial market for IPOs and acts as a price discovery mechanism before an issue opens for subscription and mostly operates in Ahmedabad, Rajkot, Kolkata and a few other smaller cities.
|
| |
| A network of brokers offers two-way quotes for shares which are on offer in an IPO. If he quotes Rs 50-52 price per share, he buys the shares at Rs 50 and sells them at Rs 52 to the buyer -- mostly retail investors.
|
| |
| The actual transfer of shares takes place when they are listed. Even if shares are listed at a discount, the broker has to pay the premium promised.
|
| |
| And if shares are traded at a much higher price than the premium, the seller has to transfer shares allotted to him, depending on the deal size.
|
| |
| If an investor has sold 100 shares and is allotted less, he has to buy the balance from the market and deliver it to the buyer-broker. There is no legal sanctity to these deals and hence they are based on trust. |
| |
|
| |
Content Guide
