Innovision IPO Day 2: Issue booked 12% as GMP remains weak. Should you apply or skip?

Innovision IPO Day 2: The initial public offering (IPO) of Innovision, which opened for bidding on Tuesday, March 10, has entered its second day today. The offer saw a tepid response from investors on the first day, with just 2% bids.

Innovision, which provides manpower and toll plaza management services, has fixed the IPO price band at ₹521 to ₹548 per share. The ₹323 crore Innovision IPO has a fresh issue of up to ₹255 crore and an offer-for-sale of up to 12,38,000 equity shares.

Investors can apply for the offer in lots of 27 shares.

The company plans to use the funds raised from the fresh share sale towards payment of debt, fund the company's working capital requirements, and for general corporate purposes.

Innovision IPO Day 2 Subscription

Innovision IPO was booked 12% as of the second day of the bidding.

The qualified institutional buyer (QIB) segment was booked the most at 96%, while the non-institutional investor (NII) quota received 19% bids. The retail portion was subscribed 6%.

Innovision IPO GMP today

The grey market premium for Innovision IPO remains weak. According to investorgain.com, Innovision IPO GMP today is nil. This means Innovision shares are trading at par with the IPO price.

At the prevailing GMP, Innovision IPO listing price will be the same as the offer price. Shares of Innovision IPO are slated to list on both BSE and NSE on March 17.

Innovision IPO: Should you apply?

Brokerages have largely assigned an 'Avoid' rating to Innovision IPO amid high valuations and weak margins.

SBI Securities said that at the upper price band of ₹548, the issue is valued at a P/E ratio of 32.5x based on its 1HFY26 annualised earnings on post-issue capital.

"When compared to its peers, the IPO valuations appear to be premium. Furthermore, the company exhibits a significant concentration of business in terms of both clients and geographical regions. It is also facing a considerable number of legal and regulatory challenges, along with debarment notices from some clients. While growth is strong, the margins are very low and are subject to high employee attrition," opined the brokerage, while advising an AVOID rating on the issue.

Swastika Investmart also said that Innovision is not a strong conviction long-term hold at this valuation unless margins show a clear upward trajectory in the coming quarters.

"At 35.69x P/E, the stock is pricing in significant future growth already. Given thin margins (~5.78% EBITDA) and a commoditised manpower/toll services business, this valuation leaves a limited margin of safety. Long-term upside at this price needs consistent margin expansion to play out," Swastika said.

The company specialises in providing manpower services, which include manned private security, integrated facility management services, as well as manpower sourcing and payroll management.

The toll plaza management operations involve user fee collection and related services at toll plazas, secured through competitive bidding processes. Additionally, the company is empanelled with NHAI for toll collection at various locations.

Emkay Global Financial Services is the book-running lead manager to the offer.

Disclaimer: This story is for educational purposes only. 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.