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Business News/ Markets / Ipo/  Manyavar-owner Vedant Fashions IPO opens today. Should you subscribe or skip? GMP, key details

Manyavar-owner Vedant Fashions IPO opens today. Should you subscribe or skip? GMP, key details

Manyavar-owner Vedant Fashions IPO is purely an OFS  of 36,364,838 equity shares by promoters & existing shareholders

IPO of Vedant Fashions Ltd, which owns ethnic wear brand Manyavar, has opened for subscription (AFP)Premium
IPO of Vedant Fashions Ltd, which owns ethnic wear brand Manyavar, has opened for subscription (AFP)

The three day initial public offering (IPO) of Manyavar-owner Vedant Fashions Ltd has opened for subscription today. The issue, with a price band of 824-866 a share, will conclude on February 8. The company on Thursday said it has garnered 945 crore from anchor investors, ahead of its offer.

As of 2:30 pm on day 1, Vedant Fashions IPO has been subscribed 0.10 times with retail investors' category booked 0.18 times, BSE data showed.

As per market observers, Vedant Fashions shares are commanding a premium (GMP) to 45 in the grey market today. The company's shares are expected to list on stock exchanges NSE and BSE on February 16, 2022.

Analysts at KRChoksey like VFL’s focus on growth by doubling its foot print in both domestic as well as international market in near term. They believe VFL will continue to grow the three new existing brands in its portfolio while it will continue to scout for inorganic growth opportunities.

“VFL has strong balance sheet with no debt and it has asset light model. Considering these positives, we recommend to “subscribe for long term gains"," said KRChoksey in an IPO note.

Vedant Fashions' 'Manyavar' brand is a category leader in the branded Indian wedding and celebration wear market with a pan-India presence. The company's other brands include Twamev, Manthan, Mohey, and Mebaz.

"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.

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.

Choice Broking views 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," it said.

The company's initial share sale is purely an offer for sale (OFS) of 36,364,838 equity shares by promoters and existing shareholders.

“Vedant is well placed to benefit from growing industry trends given its leadership position in the Indian celebration wear market.. While the valuations look stretched, the company's long term growth prospects remain promising," said brokerage Religare Broking in a note.

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Published: 04 Feb 2022, 07:17 AM IST
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