Electronics Mart India IPO is subscribed 1.69 times on day 1
- The Hyderabad-based consumer durables retail chain has been subscribed 1.69 times on the first day of the IPO subscription process.
- The company plans to raise ₹500 crore through fresh issue of shares through the IPO.
- The lender has fixed the price band at ₹56 to ₹59 a share.
- Shares of the company are commanding a premium of ₹35 in the grey market.
AdvertisementThe initial public offering of Hyderabad-based Electronics Mart India, a consumer durables retail chain, has been subscribed 1.69 times on the first day of the IPO subscription process.
The IPO received decent demand from retail investors as this portion was subscribed by 1.98 times.
The company plans to raise ₹500 crore through fresh issue of shares through the IPO. It has fixed a price band of ₹56 to ₹59 a share.
Money raised through the IPO will be utilised towards capital expenditure like opening new stores and warehouses, working capital, debt payment and general corporate purposes.
The shares of the company are currently commanding a grey market premium, or GMP, of ₹35 per share from ₹30 earlier. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.
The company’s net profit in FY22 grew 78% from the previous financial year while its EBITDA margin rose marginally to 6.7%. Covid restrictions hurt its EBITDA margin in FY21, which slipped to 6.4%, from 7.2% a year earlier.
|Category of investors||Subscription status|
|Qualified institutional buyers||1.68 times|
|Non institutional investors||1.04 times|
Electronics Mart India offers a range of products including air conditioners, TVs, washing machines, refrigerators, mobiles, small appliances and IT products. The company offers product categories from more than 70 consumer durable and electronic brands. It operates across three channels – retail, wholesale and e-commerce.
In the filing, Electronics Mart India said a risk factor attached to its business was that the company may not return to the pre-Covid growth levels due to a possible change in consumer trends post the Covid lockdowns. People may choose to opt for only essential items and do away with discretionary products like the ones they offer, it said.
Analysts at Angel One broking firm have recommended subscribing to the IPO. “EMIL has better revenue growth (CAGR of 17%) over two years, better return on equity and expansion plan on the cards. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a ‘subscribe’ rating on the issue,” Angel One said in a report.
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