Is the gray market premium misleading? Decode Valuation Gap in IP of HDB Financial

HDB Financial Services next Rs. 12,500 crore IPOs have attracted attention – mostly due to its HDFC bank parentage and previous stimuli in the gray market. But the gray market premium (GMP) now seems to be up to 50-51 or about 7% of the IPO prices, with the previous warmth merge.

Before the IPO details were announced, HDB financial shares were trading in the unlisted market of Rs 1,200–1,350 – about 70-80% higher than the IPO’s 740 high price band.

At Rs 740, the IPO values ​​the book at 3.72X FY24 – corresponding to the NBFC listed like Bajaj Finance and Sriram Finance. This suggests that despite the previous hype reflected in the unprecedented trade, the Rs.

Why discrepancy exists

1. Speculative gray market mobility
Gray market prices often reflect supply lack and loose spirit rather than professional fundamentals. Prior to the IPO announcement, the demand for demand in a limited float and unlawful space increased prices, with a little respect for the structured valuation framework.

2. Retail fo and liquidity traps
Thousands of investors bought HDB shares in a non -committed market at a price of Rs 1,200 and Rs 1,350. Depending on the IPO valuation, they now face a fantasy loss of 40-45%. For many, this IPO acts as a cautious story about the risks of depending on the gray market trends as a proxy for influence.

What is it for HDFC Bank?

HDFC Bank, which holds 95% of HDB, is the sale of 12.95 crore shares by the Sale Offer Fur (OFS). This share is original Rs. HDFC Bank was acquired at an average cost of 46.4, meaning that if the issue is subscribed to the upper end of the price band, HDFC Bank will pay Rs. Can book a benefit of more than 37373 crores.

It also helps the bank to meet the requirement of the RBI’s high-level NBFC list, while the capital is unalwed without increasing fresh equity.

Is GMP still matter?

Analysts suggest that the gray market premium can no longer be a reliable indicator of list performance, especially for large, basic precious IPOs. Recent trends have shown that anchor investors and long -term organizations are favoring a reasonable evaluation on overhice launch.

Moreover, 42-48% discount between gray market and IPO valuation presents retail investors at a relatively reasonable price to enter quality NBFCs. Even if the benefits listed are modest, HDB is given a long-term probability of HDFC parenting and focuses on Tier-2/3 markets-gravens resenses.

(Disclaimer: The views given by recommendations, suggestions, opinions and experts are their own. This does not represent the views of the economic time)