Grey market laps up RPL shares on the sly

Nimish Shukla / TNN / May 5, 2006, 23:31 IST

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With trading already taking place at over 50% premium, the market expects that RPL share to be listed at over Rs 90 per share.

Grey market laps up RPL shares on the sly

AHMEDABAD: While thousands of investors of Reliance Petroleum Limited are waiting with bated breath for listing of RPL shares on the bourses, street smart punters in Gujarat have already begun trading in the company's shares. Of course, only in the booming grey market.
Insiders say investors and traders in Ahmedabad and other parts of the state have been trading RPL share at premium of Rs 33-34 to the offer price of Rs 60 per share that has been fixed by the company.
With trading already taking place at over 50% premium, the market expects that RPL share to be listed at over Rs 90 per share.
As per the grey market norms, once the transaction has been done between the buyers and sellers at a mutually agreed amount, the seller has to give delivery of shares once he gets the allotment.

If the seller falls short in receiving the exact number of shares allotted, he will have to buy the shares from the market and give it to the buyer to honour his commitment.
According to sources, RPL shares have attracted huge interest in the grey market after an unconfirmed report trickled in that large number of multiple applications for the RPL shares have been rejected.
As a result of this, the grey market premium has gone up from Rs 28-30 to Rs 33-34.

The daily trading volumes of RPL shares in the market is estimated at over 10,000 shares in Ahmedabad. Another factor the grey market operators have cited for the higher premium for RPL shares is the strong fundamental of the company and allotment ratio of the company's share. The company has allotted 116 shares per application of 1,000 shares.
Market performance of the flagship, Reliance Industries, too has lifted the sentiments of punters. RIL share appreciated by over 9% �� from Rs 1,007 to Rs 1,099.50 during the week.
RPL's IPO was oversubscribed by 54 times and it mopped up Rs 1,37,000 crore. With this new allotment of RPL shares, 12.60 lakh new shareholders will be added to the Reliance family.
The company is planning to list its share on May 11, subject to stock exchanges approvals, company officials said.

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