About the Nova AgriTech Ltd IPO
The stock of Nova AgriTech IPO has a face value of ₹2 per share and the price band for the book building IPO has been set in the range of ₹39 to ₹41 per share. The final price will be discovered within this band. The IPO of Nova AgriTech Ltd will be a combination of a fresh issue and an offer for sale. The fresh issue portion of the Nova AgriTech IPO comprises the issue of 2,73,17,073 shares (273.17 lakh shares approximately), which at the upper price band of ₹41 per share will translate into a fresh issue size of ₹112 crore. The offer for sale (OFS) portion of the IPO of Nova AgriTech Ltd comprises the sale of 77,58,620 shares (77.59 lakh shares approximately), which at the upper price band of ₹41 per share will translate into an offer for sale (OFS) size of ₹31.81 crore. Promoters currently hold 84.27% in the company. None of the promoters or promoter group are selling shares in the IPO. The entire OFS quantity of 77.59 shares is being sold by investor shareholder (Nutalapati Venkata Subbarao), who will sell his entire 11.9% stake in the company.
About the GMP pricing for Nova AgriTech Ltd
The grey market price (GMP) trading normally starts about 4-5 days prior to IPO opening and continues till the listing date. In the case of Nova AgriTech Ltd, we already have GMP data for the last 2 days, which should give a reasonable picture of the likely listing price of the IPO.
There are 2 factors that impact the GMP. Firstly, the market conditions have a deep impact on the GMP, especially the liquidity conditions in the market. Secondly, the extent of subscription for the IPO has a deep impact on the GMP as it is indicative of investor interest in the stock. GMP can also technically be negative, which means the stock would list at a discount to the issue price.
There is one small point to remember here. The GMP is not an official price point, just a popular informal price point. However, in most cases, it has been observed to be a good informal gauge of demand and supply for the IPO. Hence it does give a broad idea of how the listing is likely to be and how the post-listing performance of the stock would be.
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