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GMP, Valuation, Other Details; Should you Invest?


Electronics Mart India IPO Day 2: The initial public offering (IPO) of Electronics Mart India (EMIL) sailed through on the first day of the bidding process. The IPO received bids for 10,58,09,796 shares against 6,25,00,000 shares on offer, according to the data available with the NSE. The issue closes on Friday, October 7, 2022. The market was closed on Wednesday for a public holiday.

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

According to the data from BSE, the quota reserved for retail individual investors (RIIs) was subscribed 1.98 times, qualified institutional buyers by 1.68 times and NII by 1.04 times.

EMIL’s performance in the Last Financial Year

In FY 2022, the company reported a net profit of Rs 103.89 crore from a revenue of Rs 4,349 crore. For the quarter ending in June 2022, EMIL reported a net profit of Rs 40.66 crore and Rs 1,410.25 crore in revenue.

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 amid reasonable valuations, growth prospects and dominance in the markets. However, a few have raised concerns over dependence on major brands and online competition.

“In terms of valuations, the post-issue P/E works out to 21.8x FY22 EPS (at the upper end of the issue price band) which is low compared to its peer Aditya Vision Ltd. Further, EMIL has better revenue growth (CAGR of 17%) over 2 years, better return on equity and expansion plan on the cards. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a Subscribe rating on the issue,” said brokerage Angel One.

Electronics Mart India IPO GMP Today

As per market observers, Electronics Mart India shares are commanding a premium or grey market premium (GMP) of Rs 34 in the grey market today. The company’s shares are expected to list on stock exchanges on Monday, October 17, 2022.

Electronics Mart India IPO Should you Invest?

Marwadi Financial Services said, “We assign a ‘subscribe’ rating to this IPO as the company is the fourth-largest consumer durable and electronics retailer in India with a leadership position in South India. Also, it is available at discounted valuation as compared to its peer.”

Incorporated in 1980, Electronics Mart India Limited (EMIL) is the 4th largest consumer durable and electronics retailer in India. The company offers a diversified range of products with a focus on large appliances (air conditioners, televisions, washing machines and refrigerators), mobiles and small appliances, IT and others. The company’s offering includes more than 6,000 SKUs (stock keeping units) across product categories from more than 70 consumer durable and electronic brands.

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.

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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