Street signs: Falling GMPs signal IPO fatigue, NFO targets on rise & more

Falling GMPs signal IPO fatigue
 
The grey market premiums (GMPs) for the IPOs that open this week are far lower compared to some of the recent issues. According to market players, the GMP for CarTrade is 25 per cent, while Nuvoco Vistas is less than 10 per cent, over their offer price. Meanwhile, Aptus Value and Chemplast Sanmar didn’t see considerable trades for the GMP to firm up. “Investors and grey market players are not able to digest so many IPOs getting launched at the same time. There is a clear fatigue building in. Investment bankers should avoid bunching up all IPOs together,” said a market observer.   
 
Sundar Sethuraman
 
Coffee stocks in focus amid Brazil frost
 

Shares of Tata Coffee and CCL Products are under the spotlight after severe frost has damaged coffee crops in Brazil, leading to a spike in Arabica coffee prices. Market watchers say both companies could make windfall gains as prices have climbed up to multi-year highs. “The frost in Brazil is threatening to damage a lot of coffee crops in Brazil, which is the top producer. The coffee production and quality in India are getting ramped up. This could be a start of the multi-year bull cycle for domestic coffee producers,” said an analyst. Shares of Tata Coffee have nearly doubled this year, while CCL is up 57 per cent.
 
Sundar Sethuraman
 
NFO targets on the rise
 
Mutual fund houses are setting aggressive asset mobilisation targets for their new fund offers (NFOs). The move follows the success of the ICICI Prudential Flexicap NFO, which garnered a record Rs 10,200 crore. “Large fund houses have instructed their sales and marketing teams to collect at least Rs 5,000 crore in the NFOs from investors, given the strong momentum in the market. Mid-sized fund houses have set the target to collect around Rs 1,500 crore,” said an industry player. Large distributors and wealth management players are also enthused by the NFO launches as it gives them a chance to pocket higher commissions.     
 
Chirag Madia