Electronics Mart India IPO: What does GMP indicate before listing of shares

According to market observers, Electronics Mart India shares are commanding a premium or gray market premium (GMP). compared to 30 in the gray market today 24 tomorrow.

The share allocation basis for Electronics Mart India IPO has been finalized and all eyes are now on the share listing. The company’s shares are expected to be listed on the stock exchanges next week on Monday, October 17, 2022.

Electronics Mart India’s IPO consisted of a fresh issue of equity shares, totaling Rs. 500 crores with No Offer for Sale (OFS) component. The price range for the offer was 56-59 per share.

The company said it intends to use the net proceeds for its capital expenditures, to support incremental working capital requirements and pay down debt and will also be used for general corporate purposes.

Established in 1980, Electronics Mart India Limited (EMIL) was established by Pawan Kumar Bajaj and Karan Bajaj as a proprietary concern with a consumer durables and electronics store under the name Bajaj Electronics. As of August 31, 2022, out of 112 stores, 100 are Multi Brand Outlets (MBOs) and 12 are Exclusive Brand Outlets (EBOs).

Its multi-brand outlets operate under the Bajaj Electronics brand name in addition to two exclusive stores named ‘Kitchen Stories’, which cater to the specific needs of kitchens, and an exclusive store format under the name ‘Audio & Beyond’. which focuses on the high-end. Home audio and home automation solutions.

“In valuation terms, the post-issue P/E works out to 21.8x FY22 EPS (at the upper end of the issue price band) which is lower than its counterpart Aditya Vision Ltd. Also, EMIL has better revenue growth (CAGR of 17% in 2 years, better return on equity and expansion plan on cards. Considering all the positive factors, we believe this valuation to be at an appropriate level.) “The brokerage Angel One said in the IPO note.