Coal India-backed Central Mine Planning & Design Institute’s (CMPDI) initial public offering (IPO) is witnessing a healthy demand in the gray market. CMPDI IPO GMP has risen by over 11% ahead of the offer launch later this week.
Amid the geopolitical tensions and market volatility, the gray market, subscription figures, and potential listing profits no longer mirror previous trends.
Post the announcement of the CMPDI IPO price band today, the GMP was trading higher.
According to the websites tracking the unofficial market, CMPDI IPO GMP is at ₹19. Considering the upper end of the IPO price band and the current premium in the gray market, the estimated listing price of Central Mine Planning & Design Institute shares is indicated as ₹191 apiece, which is 11.05% higher than the IPO price of ₹172.
The latest IPO market trends reveal that while new companies are tapping the primary market, investors are being cautious and steering clear of fresh offerings.
The IPO gray market premium for the Coal India subsidiary has been showing significant premiums after the IPO price band was revealed today.
Arun Kejriwal, the founder of Kejriwal Research and Investment Services, stated that the recent offering from Coal India’s subsidiary has generated significant profits for investors. “This makes it a preferred stock, first and foremost. Secondly, this company is involved in research and development, planning, and execution, and is essentially the expert on where mining should be conducted or avoided,” he added.
The market veteran also noted its monopolistic structure, which adds to the attractiveness of the company. “Furthermore, given the current geopolitical climate, the importance of coal has surged more than ever. Collectively, these factors render this investment appealing,” said Kejriwal.
CMPDI IPO details
CMPDI IPO price band has been fixed in the range of ₹163 ₹172 per equity share of the face value of ₹2. CMPDI IPO date of subscription is from Friday, March 20, to Tuesday, March 24. The CMPDI IPO lot size is 80 equity shares.
CMPDI IPO has allocated a maximum of 50% of the shares in the public offering for qualified institutional buyers (QIB), at least 15% for non-institutional investors (NII), and a minimum of 35% is designated for retail investors. The portion for employees has been set at up to 5,355,000 equity shares, while the portion for shareholders has been capped at up to 10,710,000 equity shares.
The preliminary allotment of CMPDI IPO shares is expected to be determined on Wednesday, March 25. Refunds will be processed on Friday, March 27, and the shares will be added to the demat accounts of successful allottees on the same day after refunds are issued. CMPDI shares are anticipated to be listed on the BSE and NSE on Monday, March 30.
The consultancy firm focused on coal and minerals is planning to secure ₹1,837.8 crore through an initial share offering, which places the company’s valuation at ₹12,280.8 crore at the upper price limit.
This initial public offering features only the sale of 10.71 crore shares by Coal India, with no new shares being created.
The company will not receive any financial advantage from the public offering. All proceeds raised, after covering the associated costs of the offering, will go directly to Coal India.
IDBI Capital Markets & Securities and SBI Capital Markets are acting as the merchant bankers for the Central Mine Planning & Design Institute IPO.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
