Allied Blenders and Distillers IPO fully booked on second bidding day: Apply or not? GMP, review, subscription status.

Allied Blenders and Distillers IPO subscription status: The non-institutional investor portion of the Allied Blenders IPO has been fully subscribed on the second day of bidding, with retail investors following suit. Allied Blenders IPO subscription status is 1.52 times, as per BSE data. 

The initial share sale got bids for 5,96,96,815 shares against 3,93,71,669 shares on offer, according to BSE data.

The portion for qualified institutional buyers (QIBs) received 14% subscription while the category for non-institutional investors got subscribed 2.98 times. The part for retail individual investors (RIIs) received 1.65 times subscription, and the employee portion has been booked 5.09 times.

On the first day of bidding on Tuesday, June 25, Allied Blenders and Distillers Ltd, the company that makes Officer's Choice Whisky, got off to a slow and steady start. Allied Blenders IPO subscription status was 51% at the end of day 1. 

The issue appeared to be sailing slowly through its first day, with the employee portion fully booked and the retail and non-institutional investor portion eventually showing interest.

While just 63% of the retail investors segment was subscribed, 87% of the non-institutional investor group was. Two percent of the subscription was made to the Qualified Institutional Buyers (QIBs) section. The employee portion was booked 2.06 times.

Also Read: Allied Blenders and Distillers IPO: Issue subscribed 51% on Day 1; check GMP, other key details

Allied Blenders and Distillers IPO, which ends on Thursday, June 27, set price band in the range of ₹267 to ₹281 per equity share, with a face value of ₹2. A day before its debut share-sale opened for public subscription, the business said on Monday that it had secured ₹449 crore from anchor investors.

Worldwide and domestically, Allied Blenders and Distillers produces, markets, and distributes alcoholic drinks. As of Fiscal 2023, the company has a market share of more than 8% in the Indian-Made Foreign Liquor (IMFL) sector based on sales volumes. Among the goods the company sells are vodka, rum, whiskey, and brandy under the IMFL brands.

Allied Blenders and Distillers IPO Review

Arun Kejriwal, founder of Kejriwal Research and Investment Services.

"Allied Blenders and Distillers, if we look at business, has a very strong brand in officers choice. I believe that for four years in a row, it was the largest-selling whisky globally. The company's balance sheet seems to be stretched. With this issue, they will be able to put things right, repay the debt ( ₹700 odd crores, etc.), which will change the balance sheet completely.

The ownership of the company and management of the company were directly linked; where the promoter was doing day-to-day management, now he has taken a back seat, handed over the charge to professionals, and moved out of day-to-day activities. This will bring substantial savings to the bottom line because he would not be taking any of those kinds of payouts. That will get saved on this plus the interest cost that would get saved post-repayment of debt would roughly get the company ₹200 crore.

So this is a big sum of money, and this would change the balance sheet of the company going forward," explained Arun.

Also Read: Allied Blenders and Distillers IPO: GMP, date, subscription status, review, other details. Apply or not?

Master Capital Services Ltd 

The brokerage claims that the business is seeking ₹1000 crore from the general public, the majority of which would be used to reduce debt till the company is nearly debt-free.

The corporation will save a tonne of money because of this because interest costs are very high. In comparison to its listed competitors, the IPO is valued at a lesser price. We suggest purchasing an IPO subscription with a long-term perspective.

SBI Securities 

Based on the post-issue capital on top pricing band, the brokerage stated that the business is valued at an annualised FY24 EV/EBITDA multiple of 31.3x. As of FY23, the company's flagship brand, Officer's Choice, has a 20.9% market share in the mass premium sector, making it one of the top participants in the IMFL industry.

With the proceeds of the offering, the business expects to lower its total debt from ₹798 crore as of December 23 to about ₹80 crore. This would assist reduce interest costs significantly, increasing profitability and return ratios. We advise long-term investors to SUBSCRIBE to the issue.

Also Read: Allied Blenders & Distillers raises ₹449.1 crore from anchor investors ahead of public issue

Allied Blenders and Distillers IPO details

Allied Blenders and Distillers IPO, which is worth ₹1,500 crore, comprises a fresh issue of ₹1,000 crore, and an offer-for-sale (OFS) of ₹500 crore worth equity shares by the promoters and other investors.

In the OFS, promoters Bina Kishore Chhabria, and Resham Chhabria Jeetendra Hemdev will off load the shares.

ICICI Securities Limited, Nuvama Wealth Management Limited, and Iti Capital Ltd are the book running lead managers for the Allied Blenders IPO, with Link Intime India Private Ltd serving as the registrar.

Allied Blenders and Distillers IPO GMP today

Allied Blenders IPO GMP today is +87. This indicates Allied Blenders and Distillers share price were trading at a premium of ₹87 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, Allied Blenders IPO expected listing price was indicated at ₹368 apiece, which is 30.96% higher than the IPO price of ₹281.

Grey market activity over the previous 13 sessions indicates that the IPO GMP is pointing higher and anticipates a solid listing today. Analysts at investorgain.com estimate that the lowest GMP is ₹0 and the maximum GMP is ₹87.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Also Read: Allied Blenders and Distillers IPO open for subscription today: 10 key risks investors must consider before investing

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.