The grey market premium (GMP) of C2C Advanced Systems’ IPO plummeted by a whopping 59 percent to its final subscription day; it touched ₹245 on November 24 but fell to ₹100 on November 26. This sharp decline came in the wake of instructions from the SEBI where the defence solutions provider was to appoint independent auditors to conduct the external review of the firm’s account books. The SEBI stepped in after an investor filed a complaint regarding the company due to the alleged lack of transparency in the reports.
The IPO attracted a lot of demand at the start with a target to mobilize ₹ 99.07 crore with a price range of ₹ 214 to ₹ 226 per share. The initial interest was fueled by a GMP of ₹245, which meant a premium of more than 100% and potential listing gains of up to 90%. The stock sale was considered a golden chance with impressive early subscription figures enriching the investors.
GMP Sink & Investor Sentiments
By November 26, the GMP had reduced to ₹100 and therefore brought down the projected listing gains to a mere 45%. Due to the extreme drop in GMP, the market participants felt concerned and shared their concerns on social media platforms including X. The extent of the decline reflects a change in the investors’ attitude after the occurrence of the regulations.
As a result of the directive by SEBI, C2C Advanced Systems made the following changes to its red herring prospectus offering non-anchor investors an option to withdraw their applications by 3 PM, November 28, 2024. Although this action is to calm investors, it has brought about another factor of indecision concerning the general response to the IPO.
Concerns over Delays in Listing on NSE
The IPO was earlier planned to launch on November 29 on the NSE Emerge platform. However, due to the regulatory focus and the subsequent decline of GMP, the listing has opened questions on whether it will go through as planned. There are increasing speculations of a possible delay which is an added pressure to the company.
The escalation of the issue with SEBI has raised investors’ concerns, especially regarding the company’s financial operations. The sentiment created by the IPO was overwhelmingly positive at first, but what followed dampened the spirits around the market launch.
Impact on Market Sentiment
The occurrence demonstrates the relevance and importance of regulatory scrutiny in the world of trading. That said, the measures adopted by SEBI have also revealed that to sustain growth, companies need to employ best practices of compliance to maintain investors’ confidence.
