IPO Effect – Shares are trading at premiere price in Grey Market

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In IPO Market Retail Investors are investing very heavily . Bangalore Based Happiest Mind IPO got subscribed in it’ opening day and that to in two hours . In Grey Market share of this company is now premiering at Rs 120 instead of Rs 110 .

Root Mobile IPO Will open today . In Grey Market Share of ROOT Mobile are trading at RS -220 which is 63% of the price band of ROOT Mobile IPO . Price Band of ROOT Mobile is Rs 345-350 .

Till Monday , In Retail Category Happiest Mind IPO got subscribed by 15 times , while the quota for non-institutional investors it was subscribed by 62% . The category of qualified institutional investors received only 8% subscription .

Retail investors are investing in Grey Market .

In Grey Market percentage of Retail Investors are increasing it is due the success of Rossari Biotech . IPO of this company was launched in Mid-July and it got Subscribed 70.73 Times and share of this company got listed on premium of 58%

According to research firms – Investors  who are getting share in Happiest Mind and in ROOT Mobile will be very lucky and also they will be making good amount of profit . It is difficult to predict that whether in grey market you will make money or not because purchasing share at higher price doesn’t guarantee that price will increase in future .

Why it is risky to Invest in Grey Market ?

Grey Market is not controlled by SEBI . It doesn’t follow any rules and regulation of SEBI . Many Investors loose there money in Grey Market it is because numbers of buyers and sellers are less . For Example – Suppose you purchased share of a company in grey market at the price of Rs 300 and now after sometime you need to purchase that share no you will not find any buyer as number of investors are less in this market in the end you will sel your share to the brokerage firm and suppose they tell you that they will give you only Rs 200 but you need money urgently so you will sell your shares at a loss .

SEBI also advises retail investors to stay away from Grey Market . In Grey Market all trading is done on trust .

In Grey market Kostak Rate of happiest Mind has reached Rs 425 per application while the Kostak rate of ROOT Mobile is Rs 900 Per Application

Kostak Rate is that rate which an investor will get after selling it’s subscription in grey market .

“Subject to deal” for happiest mind in the grey market , in which the application can be sold on share allotment , the price has reaches to Rs 7,000 per application . Such applications can be sold before listing . In such a situation , Investor get the benefit of Rs 7,000 per application .

Why Rossari Biotech IPO was successful ?

Rossari Biotech IPO was successful because of the newly opened 40 lakhs Demat Account and excessive liquidity in the market . In IPO mostly investors invests money for short term gain .

 

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