Shares of Dharmaj Crop Guard Ltd is presently trading at a grey market premium or GMP of ₹55 per share today, according to topsharebrokers.com.
GMP trend indicates upside and expects a strong listing. Brokerages are bullish about the stock performance and recommend retail investors to subscribe to it.
The agrochemical-based company will open the issue for subscription on November 28, which will remain open till November 30.
The company has set the price band for its initial public offering (IPO) at ₹216-237 per share having a face value of ₹10 each.
A fresh issue of equity shares worth ₹216 crore and an offer-for-sale of up to 1,483,000 equity shares by current shareholders make up the issue.
The net proceeds of the fresh issue will be utilised to fund capital expenditure towards setting up of a manufacturing facility at Saykha, Bharuch, Gujarat, working capital requirements, repayment or pre-payment of loans and general corporate purposes.
According to the offer paperwork, the named peers of the company include Rallis India, India Pesticides, Punjab Chem., Bharat Rasayan, Astec Lifescience, and Heranba Ind.
Grey Market Premium
The term 'Grey Market Premium' refers to the additional amount that investors are willing to pay over the issue price.
The issue price refers to the price at which shares are made available for purchase prior to being listed on a stock exchange.
GMP reflects on how an IPO issue from a certain firm would perform on the listing day. A positive GMP premium indicates that an IPO is anticipated to list at a profit, whereas a negative GMP indicates that an IPO is anticipated to list at a loss.
The grey market, also known as the parallel market, is an unofficial, unregulated sector where financial securities are traded.
It is therefore a site where shares of a firm are bought and sold outside of the official trading channels and it is unsafe to be there because it is not governed by market regulator SEBI.
It is not unlawful, despite the fact that it is unregulated. Its trading in financial instruments like startup shares that are not formally listed in the regulated market is what gives it its 'grey' status.