Varmora Granito IPO allotment likely today: Flat GMP signals muted listing. Here’s how to check status

Investors are closely watching the upcoming share allotment for Varmora Granito Pvt Ltd, following an initial public offering that saw robust demand. The issue was subscribed 5.39 times, but market sentiment suggests the ceramic and tiles manufacturer may experience a flat stock market debut.

Investor Demand and Subscription Details

The IPO attracted significant interest, particularly from retail investors, whose portion was oversubscribed 7.64 times. The non-institutional investors (NII) category saw a subscription of 2.91 times, while the qualified institutional buyers (QIB) portion was subscribed 2.87 times. The offering consisted of a fresh issue of up to 1.2 crore equity shares, with a price band set at ₹108 to ₹111 per share.

Grey Market Signals Caution

Despite the healthy subscription figures, the grey market premium (GMP) for Varmora Granito shares is currently zero. This indicates that shares are trading at their issue price in the unofficial market, signaling a lack of immediate upside and pointing towards a potentially muted listing on September 27. This disconnect between subscription demand and grey market activity suggests investors may be cautious about short-term gains.

Valuation and Use of Proceeds

The IPO was priced at a price-to-earnings (P/E) ratio of 20.37, based on its fiscal 2021 earnings. This valuation appears attractive when compared to the industry average P/E of 26.96 for its peers, which may have contributed to the strong subscription interest. Varmora Granito plans to use the net proceeds from the public offering to fund its long-term working capital requirements and for general corporate purposes.

Post-Allotment Timeline

The basis of allotment for the IPO is expected to be finalized on September 22. Unsuccessful applicants can expect refunds to be initiated on September 23, while successful bidders will see shares credited to their demat accounts by September 24. The company's stock is scheduled to begin trading on the public markets on September 27.