Vedant Fashions IPO opens tomorrow: GMP, brokerage views, key things to know before you subscribe
Manyavar owner-Vedant Fashions IPO will launch on Friday, February 4, 2022 and conclude on February 8
The three-day initial public offering (IPO) of Vedant Fashions Ltd, which owns ethnic wear brand Manyavar, will open for public subscription on Friday, February 4, 2022 and conclude on February 8. The price band has been fixed at ₹824-866 for its initial share sale.
The public issue is purely an offer for sale of 36,364,838 equity shares by promoter and existing shareholders. The company will raise up to ₹3,149 crore at the upper price band through the IPO.
As per market observers, Vedant Fashions shares premium (GMP) has slipped to ₹43 in the grey market today. The company's shares are expected to list on stock exchanges NSE and BSE on February 16, 2022.
"Vedant Fashions has high operating margin, asset light business, strong brands and wide range of products but we believe that these positives are captured in the valuations commanded by the company. Thus, we have a NEUTRAL rating on the issue," said brokerage Angel One in an IPO note.
Vedant Fashions Limited is the one of largest companies in India in the men’s wedding and celebration wear segment. The company’s flagship brand ‘Manyavar’ is a category leader in the branded wedding and celebration wear market with a pan-India presence. Other brands of the company include, Twamev, Manthan, Mohey, and Mebaz.
As of September 2021, the company has an extensive retail network with 546 exclusive brand outlets (EBOs) including 58 shop-in-shops globally, including 11 overseas EBOs across the United States, Canada and the UAE, which are countries with a large Indian diaspora.
Analysts at Choice Broking view the issue as aggressively priced leaving no margin of safety for investors. “Thereby it warrants caution on the valuation front. Furthermore, high level of receivables (avg. ~50% of sales over FY19-FY21) can erode the OCF margin going forward. Considering all parameters, we assign ‘Subscribe with Caution’ rating to the issue," they said.
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