Sharp profit booking was seen in NIACL and IFCI shares on September 8 amid fall in GMP of NSE IPO. Both stocks fell by up to 12%. NSE IPO has received final regulatory approval from SEBI.
Business: The impact of the decline in the gray market premium of NSE IPO was visible on the shares of the companies holding stake in it. NIACL and IFCI stocks fell by up to 12% in trade on September 8. Investors booked profits after the sharp rise in both the stocks in the last few weeks.
Pressure on NIACL and IFCI due to decrease in NSE IPO GMP
A sharp fall was seen in the shares of NIACL and IFCI in the trading session of 8 September. Amidst the reduction in gray market premium of NSE IPO, investors booked profits in the shares of these companies. Considering the NSE stake of both the companies, the market activities regarding IPO had an impact on their stocks.
The New India Assurance Company Limited or NIACL directly holds 1.42% stake in NSE. Whereas IFCI has about 52% to 53% stake in Stock Holding Corporation of India Limited i.e. SHCIL. SHCIL holds about 4.4% of NSE’s unlisted shares. In this way IFCI has indirect stake in NSE.
There was a rise in both the shares in the last few weeks
Amid the expectations related to NSE IPO, there was a good rise in the shares of NIACL and IFCI in the recent past. According to available information, IFCI shares had gained about 40% in the last few weeks, while NIACL shares had gained about 30% in the same period.
In such a situation, after the weakness in the GMP of NSE IPO, some investors did profit booking in shares to secure the profits already earned. Due to this, on September 8, pressure increased on both the stocks and they fell by 12%.
SEBI’s final approval to NSE IPO
The proposed IPO of NSE has received final regulatory approval from SEBI. The exchange had filed draft papers for the IPO in June. The size of the proposed issue could be around Rs 30,000 crore. Through this, the market capitalization of NSE is expected to reach more than Rs 5 lakh crore.
This IPO could be bigger than Hyundai Motor India’s Rs 27,870 crore issue in October 2024. With this, NSE IPO can be included in India’s largest public issue. According to the report, NSE is targeting the listing in the week starting September 21. However, the closing date, price band and lot size have not been announced yet.
Possible price band and GMP of NSE IPO
NSE has not yet declared the official price band of the IPO. According to a Reuters report, potential big investors, including Indian mutual funds, have shown interest in buying NSE shares at a price of around Rs 1,800 per share in informal meetings. However, the final price will be decided by NSE.
According to Investor Gain, the GMP of NSE IPO declined from Rs 285 to Rs 223 per share on September 8. GMP is not an official indicator and can change rapidly depending on market sentiment. If the estimated issue price remains Rs 1,800 and GMP remains Rs 223, the gray market price works out to be around Rs 2,023, indicating a potential profit of around 12.3%.