Mahindra Holidays' IPO revives Guj grey market

With the opening of the initial public offer (IPO) of Mahindra Holidays and Resorts today, the grey market in Ahmedabad seems to have revived after a gap of more than a year.

However, the grey market activity is limited as investors are treading cautiously after the Reliance Power IPO.

Mahindra Holidays has fixed the price band at Rs 275-325 per share. In the grey market, it is drawing a premium of around Rs 45-50 per share. Also, investors are being offered Rs 2,000 for filing a form of Rs 1 lakh.

The Mahindra Holidays’ IPO comes after a long hiatus in the primary market. “It has sparked some activity in the grey market and there are a few inquires as well. However, the momentum is not like that of the Reliance Power IPO,” said sources.

Market players believe that in the current market condition, the price of Rs 275-325 is quite high. Retail investors are still apprehensive about the market.

During the Reliance Power IPO, many investors were disappointed as hundreds of trades in the grey the market had remained unsettled.

Considering all these factors, marketmen say that the activity in the grey market this time round is not much. However, it has in a way revived grey market activities as some deals are being struck in private. The grey market of Ahmedabad is considered a litmus test for IPOs. Rajkot is yet another major centre in Gujarat.

Sources expect the grey market may gather momentum in the coming days as IPOs of some other companies are also lined up. A few Ahmedabad-based companies are also toying with the idea of coming out with IPOs soon. These companies include Adani Power, Pradip Overseas and John Energy.

Adani Power has already set the ball rolling for its IPO. Earlier, Adani Power had planned a public offer in November last year, but the plan was deferred in the wake of unfavourable market conditions.

Pradip Overseas, a leading home linen producer and exporter, is weighing options to hit the markets with its IPO. “We had filed the draft red herring prospectus (DHRP) in December last year and now we are looking to come up with an IPO. The company has plans to hit the capital markets in October-November this year,” confirmed a senior official of the company on condition of anonymity.

John Energy too is gearing up to launch its IPO for raising Rs 100 crore.