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IPO Grey Market is the over-the-counter market where deals are done in-person only among the trusted group of investors. The deals are usually facilitated by the broker in neighborhood. In this market, an investor could sell IPO share or IPO application before the company gets listed on the stock exchange.
IPO Grey Market Premium (IPO GMP) is the premium at which the IPO shares are traded in the grey market. Kostak Rate is the rate at which you can sell the IPO application for a fixed price irrespective to you get IPO allotment or not.
Note: The messages express the views of the author of the message. We do not actively monitor the contents of posted messages on this forum. We are not responsible for the contents of any messages posted. Do not vouch for or warrant the accuracy, completeness or usefulness of any message.
This page shows the archived IPO Grey Market Messages received in February, 2020
Current IPO Grey Market Premium in India Grey Market FAQs
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Lots of fancy talk is going on and investors are very excited about this IPO. Investors believed good earning in near future.
No peers available in India to compare. In foreign countries it is hard to compare apple to apple. I tried my best to do some research.
Some of my concerns:
- Asking price is very high. Asking price is about 45 times of EPS.
If we compare with major parent companies VISA, MASTER, AMERICANEX, DISCOVER then they are available at P/E from 15 to 38. These companies have monopoly in cards business. Anyone wants to issue card (credit or debit) then they needs to go with these parent companies.
If we compare with major world banks or financial institutes BofA, JP Morgan CHASE, Citi, CapitalOne, Barklays who are in credit card business then they are available at P/E from 8 to 15.
- Issue is very big. Enough stock is available for trading on listing day.
- FII knows credit card business from world and other world peers are available at low price.
- Credit card business is risky. SBI cards growth is very high. Very high risk. Chances are more to get defaulters.
- Only dependency on DII after listing.
- Grey market premium looks very high.
Conclusion:
- Apply with your own money. Don't get external finance. Don't expect much listing gain. Apply one lot in retail category. Chances are more in retail category.