For many, IPOs represent a golden ticket to stock market riches. But hidden complexities lurk beneath the excitement. Newbies often puzzle over Grey Market Premium (GMP), the registrar’s duties, and the Book Running Lead Manager’s (BRLM) responsibilities. Let’s break it down in plain terms to empower your investment choices.
GMP is the buzz in informal trading circles before shares hit exchanges. If an IPO’s issue price stands at ₹100 and GMP hovers at ₹40, traders speculate a ₹140 listing. It’s pure speculation – no SEBI oversight, no certainties. History shows GMP can mislead: premium-packed shares flop, discount ones explode.
Registrars are the backstage crew managing logistics. They collect bids, execute allotments, handle refunds, and transfer shares to demat accounts seamlessly. Firms like Link Intime and KFin Technologies ensure fairness and precision, preventing mishaps in high-volume IPOs.
BRLMs, often powerhouse banks such as ICICI Securities or Kotak, lead the charge. They design the IPO framework: sizing, pricing, demand assessment. Marketing maestros, they run roadshows, engage big-ticket investors, and synchronize all parties – from underwriters to registrars – for blockbuster subscriptions.
Market veterans highlight the BRLM-registrar tandem as IPO magic. But don’t get swayed by GMP alone. Delve into RHP details on company financials, risks, and prospects via official portals like SEBI’s site. Ignore unverified tips; prioritize verified data and personal risk tolerance for sustainable gains.