Why C2C advance IPO GMP declined by 44% & Listing Postponed?

Why C2C advance IPO GMP declined by 44% & Listing Postponed?

The C2C advance Systems IPO GMP reduced by almost 44% today which was earlier at 108% in the unlisted market after the SEBI intervention related to the company’s financials. As a result, its IPO listing got postponed leaving the way for investors to quit their bids. Anchor investors can also withdraw their application bids as per SEBI directives.

Detailed Video

Story So Far.

C2C Advanced Systems is India's leading provider of capital-based defense electronics solutions. The  C2C advance IPO from the company consists of a fresh issue of 43.8 lac shares. The IPO has a price band of Rs.214 to Rs 226 with 107.43x subscriptions at the end of Day 2. However, as of Tuesday, November 26, the third day of bidding, at 1:20 pm, the IPO subscription status was 101.64x, indicating that investors had withdrawn their bids.

Read and understand C2C Advance Systems IPO here.

The decline in grey market premiums was witnessed by the company in the SEBI’s announcement. As of Tuesday at 11:32 a.m., the C2C Advanced Systems IPO grey market premium dropped to 44.25%, below SEBI's hours of action. 

Earlier the GMP on Monday had indicated huge listing gains per share of Rs.170 or 75.22 %. Shares were expected to list at Rs.396/Share. It is now expected new listing date will be shifted by 2 or 3 days.

What’s the Whole Matter?

Securities and Exchange Board of India (SEBI) and NSE issued a notice directing C2C Advanced Systems Company to appoint independent auditors and get a separate report on its financial statements on Tuesday 26 November 2024.

“The NSE will have a monitoring agency set up on the usage of funds post-listing. The IPO listing will be postponed till an independent auditor submits a report to NSE/SEBI” said the Notice.

With directives of SEBI, the company provided investors including Anchor investors an option to withdraw their IPO bids till 28 November before 3 p.m.

(Media Reports’ Inputs included)

How Investors Can Withdraw C2C Advance Systems IPO Application Bids?

Step 1: Investors should contact the designated intermediary to withdraw their offer or application.

Step 2: A designated intermediary to respond to investor requests.

Step 3: The National Stock Exchange (NSE) portal's designated intermediary is chosen following the request to cancel the offer.

Step 4: As required, designate an intermediary to accept the acknowledgment (TSR slip) from NSE.

Conclusion

An important event in the C2C Advanced Systems IPO GMP was that SEBI intervened due to concerns regarding the financial statements of the company. Consequently, the grey market premium saw a drop, and the IPO listing was postponed. The investors were instead provided with the option to withdraw their bids, which affected the subscription rate. SEBI directed the company to appoint independent auditors and present a clear report going forward and this has impacted investor confidence in the short term. However, it would help in making things more transparent and act for accountability benefitting in the long term. Hereafter the outcome resides on how the nature of the findings turns out and how the company rectifies these issues.

Disclaimer: Not a buy or sell recommendation/advice. No investment or trading advice is given. This blog is purely for information and education purposes. Always discuss investment-related decisions with your eligible financial advisor before investing.