IPO Note: Electronics Mart IPO fully subscribed on day 1; receives total bids for 10.58 crore shares
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Mumbai : The Initial Public Offering (IPO) of Hyderabad-based consumer durable retail chain, Electronics Mart, the 4th largest and one of the fastest growing consumer durables and electronics retailers in India, received bids of 10,58,14,114 shares against the offered 6,25,00,000 equity shares, at a price band of ?56-59, according to the data available on the stock exchanges. Overall the issue was subscribed 1.69 times on the first day of bidding.
Retail Portion saw a strong demand and was subscribed 1.98 times. The qualified institutional buyer portion was subscribed 1.68 times. The reserved portion of non-institutional investors witnessed a subscription of 1.04 times. The issue kicked off for subscription on Tuesday, October 04, and will be opened till Friday, October 07.
The offer consists of a fresh issue of equity shares aggregating to Rs 500 crore, with no offer for sale component.
Ahead of its issue opening, Electronic Mart raised Rs 150 crore from marquee investors such as PineBridge Global Funds, Societe Generale – ODI and Cohesion MK Best Ideas Sub-Trust. The company aims to raise Rs 500 crore through its IPO.
Canara Bank Securities, Ventura Securities, Angel Broking, Hem Securities, Choice Broking, Indsec and Nirmal Bang have recommended a ‘Subscribe’ rating to the issue.
EMIL being the 4th largest consumer durable and electronics retailer in India with a leadership position in South India. Post issue, it attracts a price to earnings of 21.8x FY23 EPS (at the upper end of the issue price band) is low when compared to its peer Aditya Vision Ltd. Further, EMIL has better revenue growth (CAGR of 17%) over the last 2 years, better return on equity and expansion plan on the cards. It also has a long-standing relationships with leading consumer brands, it is able to obtain products at competitive prices. Given India's emerging demographics, rising per capita income, improving power situation, and multiple financing options, Brokerage houses believe the organized electronic retail segment has room to grow.
Anand Rathi Advisors Limited, IIFL Securities Limited and JM Financial Limited are the book running lead managers to the issue and KFin Technologies Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.
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