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Paras Defence IPO GMP: After two days of bidding, Paras Defence and Space Technologies initial public offering (IPO) has been subscribed 40.57 times — reflecting positive sentiment of investors towards the initial public offer. Meanwhile, taking cue from the strong demand for the public issue, grey market has also gone bullish over the defence company's public offer. According to market observers, Paras Defence IPO grey market premium (GMP) today is 240 — 5 up from its Wednesday GMP of 235.

Market observers said that small issue size, reasonable valuations and Government of India's focus on defense sector may continue to generate huge fancy towards the IPO and rising premium of Paras Defence shares in grey market reflects the same. They said that rising grey market premium of Paras Defence IPO indicates that it may have strong listing at Indian bourses.

Market observers said that Paras Defence IPO GMP today is 240 — 5 up from its yesterday's grey market premium. They went on to add that yesterday's GMP of 235 was 25 higher from its Tuesday's GMP of 210. They said that Paras Defence IPO GMP has shot up from 150 to 235 in just one week. In fact, Paras Defence IPO grey market price has surged from 180 to 240 in just 4 days. Observers maintained that such a robust premium in the grey market reflects strong demand of the public issue that may reflect in the Paras Defence IPO subscription status after the closure of this issue on 23rd September 2021 i.e. today.

What this Paras Defence IPO GMP mean

Market observers said that grey market premium is an unofficial listing gain expected by the grey market. As Paras Defence IPO GMP today is 240 against its issue price of 165 to 175 per equity share, this means grey market is expecting Paras Defence IPO listing at around 415 ( 175 + 240) — around 135 per cent higher from its upper price band.

Speaking on Paras Defence IPO; Saurabh Joshi, Research Analyst at Marwadi Shares and Finance Limited said, "Considering the FY-21 adjusted EPS of 4.05 on the post-issue basis, the company is going to list at a P/E of 43.23 with a market cap of 6,825 mn. There are no listed entities in India whose business portfolio is comparable with that of the company’s business. We assign a subscribe rating to this IPO as the company offer a wide range of products and solutions for both defense and space applications and is well-positioned to benefit from the Government’s “Atmanirbhar Bharat" and “Make in India" initiatives."

Abhay Doshi, Founder at UnlistedArena.com said, "Small issue size, reasonable valuations and Government of India's focus on defense sector may generate huge fancy in IPO." He went on to add that higher budgetary allocation for defense sector, liberal policies and PLI scheme for drones is expected benefit such companies.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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