Last day to subscribe to Manyavar’s IPO; GMP at ₹40 per share

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Last day to subscribe to Manyavar’s IPO; GMP at ₹40 per share
  • Vedant Fashions, owner of ethnic wear brand Manyavar, is planning to raise ₹3,149 crore through the IPO.
  • The IPO has been subscribed 21% in the first two days of subscription process.
  • Shares of the company are commanding a premium of ₹40 in the grey market.
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Today, February 8, is the last day to subscribe to the initial public offering (IPO) of Kolkata-based Vedant Fashions, which owns ethnic wear brand Manyavar.

In the first two days of the subscription process, the IPO received poor response from investors as it was oversubscribed by only 21%.

The ₹3,149 crore IPO is a complete offer for sale of 3.63 crore equity shares by promoters and existing shareholders. The price band of the IPO is ₹824-866 per share.
Category of investors Subscription status
Qualified institutional buyers 0.11 times
Non institutional investors0.09 times
Retail0.31 times
Overall0.21 times
The ethnic wear company sells its products through five brands -- Manyavar, Mohey, Mebaz, Manthan and Twamev. The company’s flagship brand ‘Manyavar’ is one of the famous brands known for wedding collections.

The poor demand for the company’s IPO is reflected from weak analysts commentary and premium in the grey market.

Shares of the company are currently commanding a premium of ₹40 in the grey market.
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Analysts believe it is difficult to “maintain (margins) given the competition from the local retailers, online retailers and non-branded products and building inflationary pressure. Furthermore, business is highly concentrated on wedding and festival wear and thereby vulnerable to variations in demand,” said report Choice Broking firm.

While Vedant Fashions gets pricing power over its products as the Indian wedding and celebration wear market is relatively less price-sensitive, pressure to maintain a high margin above 40% seems challenging, say analysts at Choice Broking.

A report by Anand Rathi Research pointed out risks like mounting competition in men’s celebration wear from Aditya Birla Fashion and Retail, Reliance, etc., keen competition in women’s celebration wear and slow-down in consumption.

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