NSE IPO GMP falls from ₹310 to ₹65; will it see a muted listing on Sept 24?

The grey market premium (GMP) of the National Stock Exchange of India (NSE) IPO has plunged to ₹65, falling nearly 79% from its peak of ₹310 recorded on September 5, when the public issue received approval from Sebi. The sharp decline signals that expectations of listing gains have moderated ahead of the country’s largest exchange debut on the BSE on September 24.

At the latest GMP of ₹65, NSE shares are estimated to list at around ₹1,850 against the IPO’s upper price band of ₹1,785, implying a potential listing gain of around 3.64%.

The decline has been particularly sharp in recent sessions amid subdued response to the IPO. The premium stood at ₹218 on September 11, before falling to ₹160 on September 15, ₹145 on September 16, ₹142 on September 17, ₹111 on September 18, ₹61 on September 19 and ₹48 on September 20. It recovered marginally to ₹49 on September 21.

IPO subscribed 5.71 times

Despite the sharp moderation in the grey market premium, the NSE IPO received strong demand during the five-day bidding period. The ₹22,562 crore issue was subscribed 5.71 times overall, receiving bids for 50.58 crore shares against 8.86 crore shares on offer.

Qualified institutional buyers (QIBs) led the subscription, with their portion subscribed 12.68 times. The non-institutional investor (NII) category was subscribed 6.55 times, while the retail portion was subscribed 1.39 times. The employee portion was subscribed 2.40 times.

Ponmudi R, CEO, Enrich Money, said the declining GMP indicates that expectations of a large listing gain have moderated.

“Despite strong participation from marquee anchor investors, the listing could be relatively muted if the current market sentiment continues,” he said.

He pointed to valuation and near-term growth expectations as key factors for investors to watch. At the upper price band of ₹1,785, NSE is valued at around ₹4.42 lakh crore, while regulatory changes and moderation in derivatives activity remain important factors for earnings growth, Ponmudi said.

“Therefore, I would differentiate between the listing-day performance and the long-term NSE story. A tepid or modest listing is certainly possible, but that does not necessarily weaken the long-term investment case,” he added.

The sharp correction in GMP comes despite the strong institutional response to the IPO. NSE had raised ₹6,746 crore from anchor investors ahead of the public issue, with demand coming from a broad set of domestic and foreign investors.

The IPO was an offer for sale of 12.64 crore shares, with no fresh issue component. The issue opened for subscription on September 17 and closed on September 21. The allotment is expected to be finalised on September 22, while the shares are scheduled to list on September 24.