Venus Pipes: What does the gray market indicate for the listing of Delhivery and Venus Pipes?

New Delhi: Amid the strong recovery in the secondary market, two companies, Delhivery and Venus Pipes & Tubes, are set to make their Dalal Street debut on Tuesday.

However, the gray market is not too excited about the upcoming listing, as premiums on the unofficial market signal a quiet debut for listed companies.

Delhivery, the logistics player of the new age, is exchanging hands at a slight discount of up to Rs 5 off the issue price of Rs 487. However, the number of exchanges has remained negligible, gray market sources said.

The logistics and supply chain solutions provider’s Rs 5,235 crore initial public offering (IPO) was open for subscription between May 11-13, as the company sold its shares in the range of 462-487 rupees each.

The issue was subscribed in total 1.63 times, thanks to strong bidding from the QIB. However, retailers, HNI and employees stayed out of the bidding process, part of which was not even fully subscribed.

Abhay Doshi, co-founder of UnlistedArena, said there were big concerns about the company’s valuations, which were keeping investors away from the issue, and the underwriting numbers make that clear.

“After the recent slide in start-up and new-age stocks, investors have remained skeptical on the issue,” he added. “Investors don’t want to burn their hands anymore.”

Another listing candidate, Venus Pipes and Tubes, commands a premium of Rs 35-40 or 10-12 per cent on the gray market over the issue price of Rs 326. It is a sign of a slight burst of listening.

The stainless steel tube and pipe maker and exporter raised Rs 165.42 crore through its initial public offering, sold between April 11-13 at the price range of Rs 310-326 each.

The issue was subscribed for a total of 16.31 times. Retailers led the bidding, with more than 19 times subscribing for their slice, while the QIB and HNI slice subscribed 12 times and 15.7 times, respectively.

Doshi said the company could see a slight listing thanks to the higher underwriting. “However, the smaller size of the issue inflated the company’s underwriting status.”

Other market insiders also anticipate a mixed response for upcoming debutants, following the muted pop given by

despite conservative valuations.

Vijay Singhania, president of TradeSmart, said that Indian markets have recovered in recent days, bringing some relief to traders and investors. He expects the recovery in the secondary market to support future issues.

“With a poor listing and subsequent drop in listing post-LIC, market participants were skeptical about the listing of other issues,” it added, dragging high expectations lower.

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