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Electronics Mart India IPO GMP, Subscription, Review; Should You Buy on Last Day?


Electronics Mart India IPO Last Day to Subscribe: The initial public offering (IPO) of Electronics Mart India (EMIL) continued to draw a solid response from investors on the second day of its bidding process. The IPO, which kicked off for subscription on Tuesday, October 4, can be subscribed till Friday, October 7. The company is selling its shares in the range of Rs 56-59 apiece to raise Rs 500 crore via its initial stake sale.

Electronics Mart India IPO: Subscription Status

The IPO received 7.57 times subscription on the second day of offer. It 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. Qualified Institutional Buyers (QIBs) category received 4.01 times subscription.

Electronics Mart India IPO Objective

The company said that it intends to utilise the net proceeds from the IPO to fund its capital expenditure, support incremental working capital requirements and pay debt and will also be used for general corporate purposes.

Electronics Mart India IPO Valuation

Brokerages remain positive on the issue on the back of valuations, growth prospects and dominance in the market. However, a few have raised concerns over dependence on major brands and online competition.

Considering the FY22 and FY23 annualized EPS of Rs 2.70 and Rs 4.23, respectively on a post-issue basis, the company is going to list at a P/E of 21.85x and 13.96x with a market cap of Rs2,270 crore while its peer namely Aditya Vision is trading at a P/E of 32.7x, said Marwadi Financial Services.

Electronics Mart India IPO: GMP Today

As per market observers, Electronics Mart India shares’ grey market premium (GMP) have remained steady at ₹34 in the grey market today. The company’s shares are expected to list on the stock exchanges on Monday, October 17, 2022.

Electronics Mart India IPO: Should you Invest?

“We assign a Subscribe rating as valuations appear reasonable considering the company’s strong and sustainable growth prospects and continued focus on maintaining balance of revenue growth with consistent margins in line with industry peers,” said brokerage ICICI Securities in an IPO note.

With strong potential for revenue growth and scope for further improvement in profitability, we recommend a subscribed rating for a target price of Rs 201 for long-term gains, said Ventura Securities in its IPO note.

About Electronics Mart India

Electronics Mart India (EMIL) is the fourth largest and one of the fastest growing consumer durables and electronics retailers in India. It is the largest regional organised player in the southern region in revenue terms with dominance in Telangana and Andhra Pradesh.

The company registered a healthy revenue CAGR of 17.9 per cent in FY16-21. EMIL has remained profitable even during the pandemic while its EBITDA margin has been in the range of 6-7 per cent over FY20-22.

As of August 31, 2022, out of 112 stores, 100 are multi brand outlets (MBOs) and 12 are exclusive brand outlets (EBOs). EMIL operates 89 MBOs under the name Bajaj Electronics in Andhra and Telangana, eight MBO under the name of Electronics Mart in the NCR region, two specialised stores under the name Kitchen Stories, which caters to the kitchen specific demands of its customers and one specialised store format under the name Audio & Beyond focusing on high end home audio and home automation solutions.

Anand Rathi Securities, IIFL Securities, and JM Financial Consultants are the book-running lead managers, whereas KFin Technologies has been appointed as the registrar to the issue. Shares of the company will list on both BSE and NSE.

Disclaimer: The views and investment tips by experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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