Allied Blenders and Distillers IPO day 3: GMP, subscription status to review. Should you apply as bidding ends today?

Allied Blenders and Distillers IPO: As of the third day of the Allied Blenders and Distillers IPO, the initial public offering (IPO) of Allied Blenders and Distillers Limited, which commenced on 25th June 2024, is currently open for subscription until 27th June 2024. This means that primary market investors have a single day left to apply for the public issue. The beverage company has set the Allied Blenders and Distillers IPO price band at ₹267 to ₹281, with the initial offer intended for listing on BSE and NSE. The public issue, valued at ₹1500 crore, is a combination of fresh issue and OFS (offer for sale). Stock market observers have noted that shares of Allied Blenders and Distillers Limited are trading at a premium of ₹88 in the grey market today.

Allied Blenders and Distillers IPO GMP today

As mentioned above, Allied Blenders and Distillers IPO GMP (grey market premium) today is ₹88, which is ₹3 higher than Wednesday's GMP of ₹85. They said that the positive outlook of the Indian stock market and the initial offer getting fully subscribed within two days of bidding has fueled the grey market sentiments regarding Allied Blenders and Distillers IPO. They said that the secondary market has been rising for the last three days, and this has trickled down in the primary market as well because Allied Blenders and Distillers IPO GMP on 25th June ahead of the issue opening was around ₹75. So, Allied Blenders and Distillers IPO GMNP has risen from ₹75 to ₹88 in two straight sessions.

Allied Blenders and Distillers IPO subscription status

By 2:57 PM on day 3 of bidding, the public issue was booked 13.99 times, the retail portion of the initial offer was subscribed 3.76 times, the NII portion was booked 25.99 times, and the QIB segment was filled 22.94 times.

Allied Blenders and Distillers IPO review

Giving a 'subscribe' tag to the mainboard IPO, Choice Broking said, "ABD has derived around 98% of the IMFL business from the sales of whisky, which is the largest

category of the IMFL in the domestic market. Also, the whisky market is expanding relatively better than other IMFL products. ABD, with its dominant position in the mass-premium whisky category and through brand premiumization efforts, is expected to benefit in the medium term," adding, "At higher price band, ABD is demanding an EV/S multiple of 2.3x, which is at a discount to the peer average. The demanded discounted valuation is largely due to its poor profitability compared to its peers. Despite poor profitability, ABD can generate better operating cash flow returns (concerning capital employed) between FY19-23. The company will likely abridge its profitability gaps with its peers through various cost rationalization and brand premiumization efforts. Thus, anticipating better profitability in the medium term and discounted valuations, we assign a "SUBSCRIBE" rating for the issue."

Indsec Securities has also given a 'subscribe' tag to the public issue, saying, "At an upper price band of ₹281/sh, the IPO is valued at P/S (not PE as D/E quotient is high) of 2.3x on annualized FY24 basis vs 5.4x peers' average. The company's revenue grew at a CAGR of 15.8% over FY21-23 basis. However, EBITDA/APAT grew by 2.3/20.1% over the same period. Out of net proceeds, ₹7,200mn will be utilized for debt repayment. This is expected to strengthen the balance sheet and aid FCF. The long-term growth outlook remains robust on the back of (1) lower per capita alcohol consumption vs the global average, (2) an increase in disposable income and need for premium quality products, and (3) Improved consumption trends among youth and women. However, over the medium term the company's premium mix and better acceptance of its product should drive volume growth ahead. We thus assign a "Subscribe for Long Term" rating on the IPO."

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