Electronics Mart India's 500 crore initial public offer IPO received strong demand from retail investors, with bids touching 35 per cent of the issue size within the first two hours of Day 1 bidding process. The issue received bids for 2,20, 26,626 shares against the total issue size of 6,25, 00,000 shares, according to the NSE data on consolidated bids.
Retail individual investors RIIs had bade for 1,99, 33,920 shares, which was 64 per cent of 3,12,50,000 shares reserved for the category. Non institutional investors NIIs were subscribed to 16 per cent of the quota. The bade for 3,556 shares was issued by qualified institutional buyers, QIBs.
The IPO would end on October 7, Friday.
The premium suggested a healthy listing gain ahead.
The fourth biggest electronics retailer in India has attracted 150 crore from anchor investors ahead of its initial share sale on Monday. The company told stock exchanges that it allocated 2,54, 23,728 shares at Rs 59 per share piece.
Among the foreign Portfolio investors who participated in the anchor were PineBridge Global Funds, Societe Generale ODI and Cohesion MK Best Ideas Sub-Trust.
In addition to this, shares were allocated to domestic funds such as Nippon Life, HDFC Trustee Co Ltd, Motilal Oswal Midcap Fund, Sundaram Mutual Fund, White Oak Capital Flexi Cap Fund, Abakkus Emerging Opportunities Fund, Tata AIA Life Insurance Co Ltd, Mirae Asset Balanced Advantage Fund and others.
Analysts are positive about the company's prospects. One of them, Ventura Securities, believes that the stock, when it is listed, could potentially touch the Rs 201 level in the long term.
The company is expecting to report a revenue CAGR of 19.4 per cent, Ebitda CAGR of 22.1 per cent and a PAT CAGR of 22.9 per cent over FY 22 -- 25 E, according to the brokerage.
Ebitda and net margins are expected to improve 46 bps to 7.2 per cent and 22 bps to 2.6 per cent, respectively. The return ratio of RoE is expected to decline 526 bps to 12.2 per cent RoIC by FY 25, as a result of the decline of 308 bps to 22.2 per cent.
What others say?
The company has shown superior performance among all major consumer durable and electronics retailers in India in terms of growth and has also managed to deliver a positive return on equity of 17.4 per cent during the Covid impacted year of FY 22.
We believe that EMI is being offered at attractive valuations at PE of 21.8 times FY 22 and EV Ebitda of 9.7 times. Nirmal Bang said that they recommend subscribing to the issue.
Elara Securities said that Electronics Mart India may continue to grow at a healthy pace in terms of store expansion, especially in North India, given the customer shift towards modern format large retailers.
The stock is expecting a valuation of 18.5 times FY 22 EPS, which is significantly lower than the stock Aditya Vision that trades at 23.7 times FY 22 EPS. The IPO is priced attractively and we therefore recommend a price.