Manyvar’s parent company Vedant Fashions’ IPO has been subscribed 0.20 times so far on the second day of sale with retail investors subscribing to the issue in the highest numbers so far.
Manyvar’s parent company Vedant Fashions’ IPO has been subscribed 0.20 times so far on the second day of sale with retail investors subscribing to the issue in the highest numbers so far. In the grey market, Vedant Fashions public issue is trading at a soft premium of just Rs 16 per share down from Rs 40 earlier last week. Shares of Vedant Fashions have been offered to investors in the fixed price band of Rs 824-866 per share. The Rs 3,149 crore IPO of Vedant Fashions is entirely an Offer for Sale (OFS) by existing shareholders of the company, including the promoters. The issue will remain open for subscription till tomorrow evening.
So far retail investors have subscribed their portion of the issue 0.30 times, bidding for 38.50 lakh equity shares against 1.27 crore on offer. Qualified institutional buyers (QIB) have bid for the IPO 0.11 times. QIBs have subscribed to 7.83 lakh shares against the 72.72 lakh on offer. The non-Institutional portion of the issue has been subscribed 0.08 times, with bids coming on for just 4.44 lakh shares. With this, the total bidding for the issue has reached 0.20 times.
“The volatility in the secondary market seems to have spread to the primary markets. Vedanta Fashion IPO has received a muted response in the first two days reflecting the bearish sentiment in the secondary market,” Vijay Singhania, Chairman, TradeSmart, told TheSpuzz Online. He added that in terms of valuation, the company is priced at a premium as compared to its peers though it has the best in class financial parameters. Earlier ahead of the subscription window opening last week, anchor investors were allotted more than 1 crore equity shares at the higher end of the price band.
Should you subscribe?
BP Wealth: Avoid
Analysts at the brokerage firm said that the issue is aggressively priced. “On the upper end of the price band, the issue is valued at a PE of 108x (based on FY22 annualized earnings), which we believe is aggressively priced,” they said. BP Wealth said that because Vedant Fashions caters to a very niche segment (Indian wedding and celebration wear), it puts their business at considerable risk.
Antique Stock Broking: Avoid
Vedant Fashions’ business is liked by Antique Stock Broking, however, a limited upside is seen. “We like the company’s fundamentals but believe that the positives are captured in the valuations commanded by the company. We see limited upside from the IPO price and would wait for better entry levels going ahead,” they said. Antique stock broking added that at the upper band, EV/EBITDA stands at 53x FY20 EBITDA while Titan /Trent/Avenue Supermarts/VMart/ ABFRL/TCNS trade at 88x/ 70x/121x/30x/18x/12x FY20 EBITDA.
INDSEC: Subscribe for Long-term
“At the upper price band of Rs.866, the stock is trading at 158.1x FY21 P/E. Thus, we assign a SUBSCRIBE RATING FOR LONG-TERM,” said INDSEC in a note. The brokerage firm added that rising disposable income levels, urbanization, multi-day and multi-event wedding celebrations, shift from tailored to ready-to-wear celebration ethnic apparel, and increased penetration of branded players in tier-II and tier-III markets would bode well for Vedant Fashions.
TheSpuzz .. Click here to join our channel and stay updated with the latest Biz news and updates.