Paras Defense IPO: Investors are very excited about the issue of Paras Defense in the defense and space engineering sector. The issue of the company has been subscribed 40.57 times till the second day. The impact of strong investor response is also clearly visible on the company’s gray market premium (GMP). The GMP of Paras Defense’s IPO increased to Rs 240 on September 23 from Rs 235 a day earlier.
On September 22, the unlisted shares of Paras Defense were trading at Rs 210 in the gray market. On September 23, this price increased to Rs 235 and today it is trading at Rs 240. Within a week, the GMP of Paras Defense has increased from Rs 150 to Rs 235.
What is GMP related to listing?
The price band for the issue of Paras Defense is Rs 165-175. Accordingly, the unlisted shares of the company are trading at Rs 415 (175 + 240) in the gray market. That is, it is trading 135% above its upper price band.
What is the reason for the strong boom?
According to market experts, it is being liked due to the small issue size, reasonable valuation and the government’s focus on the defense sector. Experts say that it is clear from the strong GMP that the listing of Paras Defense shares is going to be tremendous.
Akhil Rathi of Marwari Shares says that due to the small size, there was a strong response on the first day of the IPO. The company provides a wide range of products and solutions to the defense and space sectors. The company will further benefit from self-reliant India and Make in India. The valuation of the company is also very attractive. Its market cap is Rs 682.5 crore.
Long term investors can expect good returns from this investment. As of June 2021, the company has orders worth around Rs 305 crore. Due to which good growth is expected in its income. Paras Defense has a wide range of products and has a good list of good customers. This will give good benefits to the company going forward.