IPO Watch: CAMS, Chemcon oversubscribed, Angel Broking going strong but grey market premiums slip

The three ongoing IPOs are not looking to be dismayed by the bearish market sentiment that has erased all gains made so far this week. Of the three IPOs currently on offer, two have been oversubscribed by investors. Chemcon Speciality Chemicals IPO was subscribed 12.62 times while Computer Age Management Services (CAMS) IPO was subscribed 193% on Tuesday — the second day of bidding for both. Angel Broking, the latest IPO to step foot into the market today, was subscribed 77% on day one. Equity markets have recently witnessed bumper listings of Happiest Minds and Route Mobile shares.

Who bid how much for which issue

CAMS IPO, after being fully subscribed by retail investors on day one of the issue, reached overall oversubscription in less than two hours on Tuesday morning. Retail investors have so far subscribed to their portion 2.91 times. QIBs have so far subscribed to their quota 0.83 times and Non-Institutional Investors (NII) have bid for 121% of their portion. CAMS’ IPO consists of only an Offer For Sale from NSE Investments, an existing shareholder, and no fresh issue. The Rs 2,244-crore IPO is the largest to enter markets so far this fiscal year.

Speciality chemicals manufacturer, Chemcon was already fully subscribed on day 1 of the issue, and on Tuesday its subscription reached 12.62 times. Here, retail investors have subscribed their portion 22.93 times and even NIIs have oversubscribed their quota 3.50 times. QIB subscription was at 1,37 times . Angel Broking, the newly opened issue, was seeing strong demand from retail investors who have fully subscribed their portion. Overall the issue was subscribed 77%.

Grey market turning darker

However, with markets lipping lower, the grey market premium of these IPOs have taken a hit. “CAMS is at a premium of Rs 276 per share, Chemcon is at Rs 247 per share, and Angel Broking is at Rs 35 per share,” said Dinesh Gupta, Partner, UnlistedZone. Premium in the unlisted market have taken a toll as equity markets started tumbling down. “If subscription takes a hit that will reflect in the premium on grey market, it could be similar to what happened with SBI Cards IPO, the euphoria was not carried on to listing,” Narottam Dharawat, founder, Dharawat Securities told Financial Express Online.

Should you jump in, or stay away?

However, market analysts still advise investors to subscribe to the three IPOs. “If IPOs come in large numbers they could hit liquidity in the market and we have three IPOs currently and another one just on the door,” said Vishal Wagh, Head of Research, Bonanza Portfolio. He added that investors could look to subscribe to the issues for listing gains but beyond that was still uncertain. Abhimanyu Sofat, Head of Research, IIFL Securities too claims that IPOs are looking good to invest in. “Markets were highly valued so they needed a reason to correct,” he added.