Electronics Mart India IPO subscribed 7.57 times on Day 2 of offer

The Initial Public Offering (IPO) of consumer durables retail chain Electronics Mart India received 7.57 times subscription on the second day of offer on Thursday.

The IPO got bids for 47.29 crore shares against 6.25 crore shares on offer, according to NSE data.

The category for non-institutional investors was subscribed 11.74 times, while the portion for Retail Individual Investors (RIIs) attracted 7.81 times subscription.

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QIBs subscription

Qualified Institutional Buyers (QIBs) category received 4.01 times subscription.

The IPO consists of a fresh issue of equity shares aggregating to Rs 500 crore, with no offer for sale component.

Price range for the offer is Rs 56-59 a share.

Strong demand

The IPO is seeing strong demand in the grey market as the trading premium has hit higher double-digits since the announcement of the price band last week. The grey market is an unofficial trading platform for IPO shares. Generally, IPO investors consider this price movement here to gauge the expected listing price of any issue.

On Tuesday, the public offer of Electronics Mart India was subscribed 1.69 times on the first day of offer.

The domestic equity markets were closed on Wednesday for the Dussehra festival.

Reasons for premium

Attractive valuations, leadership position in consumer durable and electronics retail in south India, consistency in financial performance, favourable pricing power from brands and a strong expansion plan may be some of the reasons for the healthy grey market premium enjoyed by EMIL, analysts reasoned.

Electronics Mart India Ltd (EMIL) was founded by Pavan Kumar Bajaj and Karan Bajaj as a proprietary concern with a consumer durables and electronics store under the name of Bajaj Electronics.

Its multi-brand outlets operate under the brand name Bajaj Electronics other than two specialised stores under the name ‘Kitchen Stories’, catering to kitchen specific-requirements, and one specialised store format under the name ‘Audio & Beyond’, focusing on high-end home audio and home automation solutions.

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Anand Rathi Share and Stock Brokers, IIFL Securities and JM Financial are the managers to the offer.

Largest player in AP, Telangana

EMIL is the fourth-largest consumer durable and electronics retailer in India, and the largest player in the southern region with dominance in Telangana and Andhra Pradesh, offering more than 6,000 store-keeping units (SKUs) across product categories from more than 70 consumer durable and electronic brands.

The company operates its business through 112 stores across 36 cities.