Deepak Builders IPO: GMP indicates double digit listing gains for investors

Shares of Deepak Builders are expected to make their debut on the bourse on Monday, October 28, 2024. Here's what the Grey Market Premium (GMP) hints at for the likely listing price

Deepak Builders IPO listing price prediction: The grey market premium for the Deepak Builders & Engineers IPO remains intact ahead of their market debut scheduled for Monday, October 28, 2024. The unlisted shares of Deepak Builders were trading at a premium of around Rs 50, translating to a GMP of 24.63 per cent from the upper end of the IPO price of Rs 203, as revealed by sources tracking grey market activities.  The allotment for Deepak Builders IPO was finalised yesterday, October 24, with shares issued at Rs 203 apiece. 

That said, the shares of Deepak Builders are tentatively set to debut on the bourses on Monday, October 28, 2024. Considering the current GMP trends, Deepak Builders' shares are expected to list on the BSE and NSE at around Rs 253 (IPO GMP + Issue price), offering a return of around 25 per cent to investors who were allotted the company’s shares in the IPO.

 

Shivani Nyati, Head of Wealth at Swastika Investmart, expects a strong listing for Deepak Builders based on its grey market premium (GMP), suggesting a listing price of around Rs 253. The robust subscription of 41.54 times further supports positive listing expectations, Nyati noted.

 

However, considering current market conditions, there's a possibility that expected gains may be slightly dampened, prompting investors to exercise caution, she added.

 

"Post-listing, investors should reassess their position based on actual listing performance," Nyati said. "While short-term gains appear promising, those with a long-term perspective may opt to hold, given Deepak Builders' solid fundamentals and high subscription, potentially leading to further appreciation. Conversely, booking partial profits at listing could be a prudent approach for risk-averse investors, considering market volatility."

 

Deepak Builders & Engineers India is a leading construction company specialising in infrastructure development. Through the IPO, the company offered a fresh issue of 10,700,000 shares and an offer for sale of 2,110,000 shares with a face value of Rs 10 apiece. Deepak Builders reported that it had already raised Rs 78.01 crore from anchor investors ahead of the issue opening for public subscription. The public issue was available with a price band of Rs 192 - 203 and a lot size of 73 shares. 

The Rs 260.04 crore offering of Deepak Builders received bids for 37,24,79,872 shares against 89,67,061 shares offered, thus getting oversubscribed 41.54 times by the final date of subscription, according to NSE data. This demand was led by Non-Institutional Investors (NIIs) who placed the highest bids for the IPO, with a subscription of 82.47 times, followed by retail investors at 39.79 times, and Qualified Institutional Buyers (QIBs) at 13.91 times.

 

Deepak Builders proposed to utilise the IPO proceeds for the repayment or prepayment, in full or part, of certain borrowings availed by the company, as well as for funding working capital requirements and general corporate purposes.