The Campus Activewear IPO (Initial Public Offering) will open on April 26, 2022 and will remain open to subscribers until April 28, 2022. However, the gray market has already started reporting in regards to the public offering a value of ₹1400.14 crore. According to market watchers, the Campus Activewear stock price is quoted at a premium of ₹60 on the gray market today. They said that Campus Activewear IPO GMP went from ₹53 and this indicates that the gray market is expecting a strong response from the public issue.
Campus Activewear IPO GMP
Market watchers said Campus Activewear IPO GMP (grey market premium) is today ₹60, which is ₹7 more than his gray market bounty from yesterday ₹53. Observers added that the gray market premium for the Campus Activewear IPO has been hovering around 18-20% over the past three days, signaling a strong response for the IPO during its opening. They said that despite weak secondary markets, gray market sentiment towards the Campus Activewear IPO remained more or less the same, reflecting an increase in the Campus Activewear IPO. Activewear GMP once there is a trend reversal in the stock market.
What do these GMPs mean?
According to market watchers, Campus Activewear IPO GMP is today ₹60, which means the gray market expects this IPO to trade around ₹352 ( ₹292 + ₹60), about 20% more than its upper price range of ₹292 per share. They said the Campus Activewear IP gray market premium being at such high levels before subscription opened is a good sign. This may be reflected in the strong take-up of the IPO when it opened on April 26.
However, stock market experts have advised investors to trust the company’s balance sheet rather than gray market sentiments. They stated that the gray market premium of a public offering is an unofficial data that signals the expected premium of the IPO on a given date. It keeps changing and it has nothing to do with the company’s balance sheet. It is the balance sheet of the company that gives a concrete idea of the fundamentals of the company.
Speaking on the actual fundamentals of Campus Activewear Limited; Saurabh Joshi, Research Analyst at Marwadi Financial Services, said, “Given the TTM (December 21) EPS of ₹3.12 on a post-issue basis, the company will list at a P/E of 93.72x with a market capitalization of Rs.88,863mn while its peers, namely Relaxo Footwear and Bata India Ltd, are trading at a PE of 103x and 357x. We are assigning a ‘Subscribe’ rating to this IPO as the company is the largest sports and athletic footwear brand with 17% market share by value in India. Furthermore, it is available at a reasonable valuation compared to its peers.
Warning: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.