KIMS, Dodla Dairy IPOs: Grey market premiums increase on day 2 of bidding; should you subscribe?

Up to now, Dodla Dairy’s Rs 520 crore IPO has been subscribed 2.02 occasions by buyers whereas KIMS’ Rs 2,143 crore difficulty has been subscribed to 0.33 occasions.

On the second day of bidding, Dodla Dairy and Krishna Institute of Medical Sciences (KIMS) preliminary public choices proceed to draw investor’s curiosity. Whereas subscription figures are bettering, each the IPOs have additionally been gaining momentum within the gray market. After getting off to a muted begin, Dodla Dairy was now commanding a premium of Rs 75-85 per share, whereas KIMS was buying and selling at a premium of Rs 60-67 per share. Up to now, Dodla Dairy’s Rs 520 crore IPO has been subscribed 2.02 occasions by buyers whereas KIMS’ Rs 2,143 crore difficulty has been subscribed to 0.33 occasions.

Gray market premium will increase

Dodla Dairy’s shares had been buying and selling at a premium of Rs 75 apiece within the gray market whereas KIMS was quoting a worth of round Rs 60 per share, Narottam Dharawat, founder, Dharawat Securities instructed Monetary Categorical On-line. “The premium has elevated immediately as subscription figures enhance. When the IPOs opened for subscription, the premium was nil, nonetheless, that appears to be altering now,” he added. Narottam Dharawat mentioned that KIMS, being within the healthcare sector may very well be interesting in the course of the occasions of covid-19, whereas Dodla Dairy is extra a momentum play.

Seeing a barely greater premium, Dinesh Gupta, Associate, UnlistedZone mentioned that Dodla Dairy was buying and selling at Rs 85 per share whereas KIMS was round Rs 67 per share. Gupta added that KIMS seems to be enticing of the 2 points open for subscription at this juncture.

IPO subscription standing

Retail buyers have oversubscribed KIMS IPO whereas Certified Institutional Patrons (QIB) and Non-Institutional Buyers (NII) have bid for 0.14 and 0.04 occasions the portion reserved for them. Workers of the healthcare agency even have a portion reserved for them which has been subscribed 0.29 occasions, taking the general subscription determine to 0.33 occasions your complete difficulty. 

In the meantime, Dodal Dairy has seen retail buyers bid for 3.77 occasions the reserved portion. QIB subscription determine is at 0.24 occasions and NIIs have bid for 0.33 occasions the reserved quota. With this, your complete subscription determine has reached 2.02 occasions. The difficulty was oversubscribed on day one.

Do you have to subscribe?

Brokerage and analysis agency ICICI Direct has a ‘Subscribe’ ranking on KIMS IPO. “Amid benefit of regional dominance, operational effectivity, KIMS has demonstrated probably the greatest monetary performances amongst friends. It additionally has nearly internet debt-free b/s, wholesome FCF in FY21 regardless of working in an asset-heavy business,” ICICI Direct mentioned. However, Dodla Dairy’s IPO has not been rated by the brokerage agency. 

Analysts at Angel Broking have a ‘Subscribe’ ranking on Dodla Dairy. The brokerage agency mentioned that the post-issue 9MFY21 annualised PE works out to 16.4x (on the higher finish of the difficulty worth), which is low in comparison with Parag Milk Foods (buying and selling at 32.7x).