After announcement of Paytm IPO allotment status, all eyes are now set on the share listing date i.e. 18th November 2021. However, some market observers and bidders are keeping their eye on the grey market as well. According to market observers, Paytm share price has been nosediving in the grey market, which has become a matter of concern for some bidders as grey market premium (GMP) indicates about the expected listing gain from the public issue.
Paytm IPO GMP
According to market observers, Paytm IPO GMP today is in negative zone as shares of the fintech company are available at a discounted price of ₹30. They said that Paytm IPO GMP has been nosediving for last one week and it has come down from ₹150 levels to this minus ₹30 levels in this period. Paytm IPO grey market price on yesterday was Zero. Market observers went on to add that Paytm share price drying in the grey market is a matter of concern as it is giving signals that Paytm shares may list at discounted price. However, they said that heavy sell off in the stock market on Monday can also be a reason for Paytm shares slipping in the negative zone today.
What this GMP mean?
Market observers said that GMP of a public issue is an unofficial signal in regard to the share listing of the company. As Paytm IPO GMP today is minus ₹30, it means grey market is expecting that Paytm shares will list at ₹2120 ( ₹2150 - ₹30) against its price band of ₹2080 to ₹2150 per equity share.
Elaborating upon the reasons for crash in Paytm IPO GMP, market observers said that the public issue got a tepid response from the investors. Paytm IPO subscription numbers looks lack-luster. They went on to add that high valuations, huge issue size, continuous losses and challenging road to profitability are the factors, which made investors wary.
