Paras Healthcare’s initial public offering (IPO) opens for subscription today, 21 October, and will stay open until 23 October. The company is looking to raise Rs 1,450 crore in total.
The offer is split into two parts. A fresh issue of Rs 500 crore will bring new money into the company. The remaining Rs 950 crore comes through an offer for sale (OFS), where existing shareholders sell some of their holdings. Money from an OFS goes to the selling shareholders, not to the company.
In the unofficial grey market, the shares are trading at a premium of around 7%. The grey market premium, or GMP, is a informal indicator of how much extra buyers are willing to pay for the shares before they are listed. It is not an official figure and does not guarantee how the stock will perform when it starts trading.
Investors have a three-day window to apply, with the issue closing on 23 October. Anyone considering a bid should look at the price band, the lot size and the company’s financials in the offer documents before deciding.
The mix of fresh issue and OFS is worth noting. The larger share of the offer, Rs 950 crore, is the OFS portion, so most of the money raised will go to existing shareholders rather than being used by the company itself.
As with any IPO, the grey market signal can change quickly while the issue is open, rising or falling with demand from investors. A premium of around 7% suggests some positive sentiment ahead of the listing, but it is only one data point and should not be the sole basis for an investment decision.
Paras Healthcare’s issue is now live, and subscription levels over the three days will show how much appetite there is for the shares.