Shares of Milky Mist Dairy Food Ltd. will launch their stock market debut on the National Stock Exchange (NSE) and BSE on Tuesday, August 18. Before the company’s stock market debut, investors will be watching the latest Grey Market Premium (GMP) data to assess how the shares will perform when trading begins.
The latest available GMP for the Milky Mist IPO was at around 8:00 a.m. on August 18. Based on this GMP and the IPO's upper price band of ₹140 per share, the estimated listing price works out to around ₹159.70 per share.
This would be a listing premium of about 14.07% over the issue price.
But investors should remember that GMP is unofficial and speculative. It is not exactly the stock’s listing price, and the shares could debut at a much different price depending on market conditions, investor sentiment, and demand at the time of listing.
Milky Mist expected price for listing
The Milky Mist IPO had a price band of ₹133 to ₹140 per share. With the latest GMP at ₹19.70, the estimated listing price based on the upper price band is:
IPO upper price: ₹140
Latest GMP: ₹19.70
Indicative listing price: ₹159.70
Potential premium: 14.07%
The actual listing price will be determined by market forces when trading begins on the exchanges.
The strong subscription numbers for the IPO have also attracted attention ahead of the debut.
Milky Mist IPO subscribed 56.12 times
The public issue received an overwhelming response from investors during the three-day bidding period, which ended on August 13.
The IPO was subscribed 56.12 times
The Qualified Institutional Buyers (QIB) portion drew especially solid demand and was subscribed 155.83 times. The Non-Institutional Investors (NII) category was subscribed 34.91 times, and the retail investor portion was subscribed 8.41 times.
The heavy institutional participation is one of the factors investors are considering when assessing the potential market debut of Milky Mist shares.
The share allotment was completed on August 14 ahead of the scheduled listing date.
Milky Mist IPO details
The Milky Mist Dairy Food IPO has a total issue size of about ₹1,553 crore.
The issue comprises:
Fresh issue: 10.2 crore equity shares worth ₹1,428 crore
Offer for Sale (OFS): 89.28 lakh equity shares worth ₹125 crore
Price band: ₹133–₹140 per share
Retail minimum bid: 107 shares
Investment required at upper price band: ₹14,980
JM Financial Ltd. served as the book-running lead manager for the issue, and KFin Technologies Ltd. was the registrar.
When the shares are launched, investors will be watching the opening price closely to see if the stock gets a premium in line with the GMP indication or is volatile after listing.
How does Milky Mist plan to use IPO proceeds?
A large portion of the funds raised through the new issue is expected to be used to strengthen the company's financial position and expand its manufacturing capabilities.
The company plans to utilize approximately:
₹496.86 crore towards repayment or pre-payment of some borrowings.
₹469.24 crore for capital expenditure for expansion of manufacturing plants.
₹155.31 crore for coolers and freezers.
The rest of the funds for general corporate purposes.
The investment will be for its manufacturing and distribution infrastructure to be reinforced.
What does Milky Mist Dairy Food do?
Milky Mist Dairy Food Ltd., incorporated in 2014, is in the packaged food and dairy products business.
The company focuses on processing and marketing value-added dairy products. Its products include paneer, cheese, curd, butter, ghee, yoghurt, ice cream and ready-to-cook products.
The company has a strong presence in southern India and caters to consumers with a wide portfolio of dairy and packaged food products.
What should investors look for with listing?
As the GMP indicates a possible listing premium, investors should not take it as a guarantee of market performance.
When the shares are listed on NSE and BSE, the price will depend on actual buying and selling activity. Broader market sentiment, investor expectations, the company’s financial performance, valuation and developments in the dairy and packaged food sectors could affect the stock.
Investors need to distinguish a listing gain from the company's long-term performance as well. A stock can list at a premium and then go down, or it may see even more gains on listing.
Instead of relying solely on the grey market premium, investors should examine the company’s fundamentals, valuation and risk profile.
The Grey Market Premium (GMP) figures are unofficial and speculative and should not be considered a reliable indicator of the actual listing price. The estimated listing price and potential gain mentioned above are calculations based on the reported GMP and IPO price band. Investors need to research and consult with a qualified financial adviser before investing.
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