Danish Power IPO: GMP Hints 65% Gain A Day Ahead Of Listing

Shares of Danish Power Ltd., a transformer manufacturer, are set to list on the NSE SME platform on Oct. 29. Ahead of the much-awaited listing, the grey market premium on the IPO stood at Rs 246 as of 11:31 a.m. on Oct. 28, indicating a strong premium. As per InvestorGain, the Danish Power Ltd. stock is likely to list at Rs 626, marking a 64.74% premium over the IPO’s upper price band of Rs 380. 

However, the GMP on the Danish Power IPO has dropped from its earlier level of Rs 300, recorded at the closure of the subscription window. 

Investors must note that GMP is not a true indicator of how a stock may perform and only represents a speculative trend. 

The Danish Power IPO was open for subscription between Oct. 22 and Oct. 24.

The issue received a strong response from investors, witnessing an overall subscription rate of 126.55 times. Qualified Institutional Buyers bid for 104.79 times the shares reserved for them, while non-institutional investors booked their allocation 275.92 times. Retail investors applied for 79.88 times the shares reserved for the category.

Share allotment in Danish Power IPO was finalised on Oct. 25.

The Danish Power IPO price band was fixed at Rs 360 to Rs 380 per share. Retail investors were required to buy at least 300 shares in a single lot taking the minimum investment amount to Rs 1,14,000 per application.

The public offer is an entirely fresh issue of 52.08 lakh shares worth Rs 197.90 crore.

Link Intime India Pvt. was the registrar for the Danish Power IPO.

Danish Power, in its red herring prospectus, said that it will use the IPO proceeds to fund the capital expenditure on building a shed and installing an additional plant and machinery at its Mahindra World City unit in Jaipur, Rajasthan. 

The remaining money will be used for working capital, repayment of debt and general corporate purposes.

Danish Power Ltd. manufactures various types of transformers. This includes inverter duty transformers and oil and dry type power and distribution transformers. The company has two manufacturing units in Rajasthan’s Jaipur, at the Sitapura Industrial Area and Mahindra World City.

Disclaimer: Investments in initial public offerings are subject to market risks. Please consult with financial advisors and read red herring prospectus thoroughly before placing bids.