The three day initial public offering (IPO) of Electronics Mart India (EMIL) has opened for public subscription on Tuesday and will conclude on October 7, 2022, with the price band at ₹56-59 per share. The initial share sale consists of a fresh issue of equity shares aggregating to ₹500 crore, with no offer for sale (OFS) component.
As of 1:15 pm on day 1, the issue has been subscribed 0.54 times with retail investors’ category booked 0.94x, Non Institutional Investors (NIIs) 0.33x, BSE data showed.
As per market observers, Electronics Mart India shares are commanding a premium or grey market premium (GMP) of ₹31 in the grey market today. The company’s shares are expected to list on stock exchanges on Monday, October 17, 2022.
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.
“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.
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.
“Electronics Mart India is amongst the dominating consumer durables and electronics retailer centralised in South India. Almost 90% of its revenues come from retail chains. 50% of its revenue comes from the sale of large appliances. Based on FY22 earnings post fresh issue, the IPO is priced at a p/e of 21.77x on the upper band, which seems to be moderate as the sector is highly competitive with the presence of deep pocketed players – in both online & offline segments,” said Abhay Doshi, co-founder, UnlistedArena.