Manyavar IPO: Ahead of the opening of the IPO, the shares of Vedant Fashions in the primary market have reached a premium of Rs 44 against the IPO price.
Manyavar IPO: The IPO of Vedanta Fashions Limited, the parent company of ethnic wear brand Manyavar, will open for subscription on Friday, February 4. In this IPO of Rs 3150 crore, investors will be able to bid till February 8. This IPO is purely on offer for sale (OFS). 3.63 crore equity shares will be sold by the existing shareholders of the company. The price band of the issue has been fixed at Rs 824-866 per share. Vedanta Fashion’s IPO will be the third public issue of 2022 after AGS Transact Technologies and Adani Wilmar.
price in gray market
Before the opening of the IPO, its shares in the primary market have reached a premium of Rs 44 against the IPO price. According to people dealing in shares of un-listed companies, shares of Vedanta Fashion were trading at Rs 890 with a gain of about 3 per cent in the gray market.
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Subscribe or not, here is the opinion of experts
- Vedanta Fashion is a leading player in the branded Indian Wedding and Celebration Wear market. Analysts say that revenue has been affected to a large extent due to the pandemic, however, the performance of 6MFY22 shows recovery amid re-opening.
- Abhay Doshi, Founder, UnlistedArena.com says, “We are confident that the performance of the next six months will be crucial. In terms of valuation, based on annual FY22 earnings and sales, the issue price is 108x its earnings and 29.2x sales.
- Doshi further said that the valuation looks expensive. He said, “The primary market sentiments have declined amid global selloff. Due to the high prices, there is a lack of attractiveness about this issue.”
- Vedanta Fashion, commonly known as Manyavar, is a well-known name in the celebration wear market. Ravi Singh, VP and Research Head, Share India Securities told Financial Express Online, “The financial position of the company is not promising and has declined since the COVID pandemic. The company’s total assets and profit margin have also come down.
- Singh further said that the price band of the IPO seems to be higher than the valuation. “We advise investors to avoid subscribing to this IPO,” he said.
- Manyavar is a leading company for clothing worn on the occasion of weddings and celebrations. Apart from Manyavar, Vedanta Fashions is spread across the country under the brand names of Tvmev, Manthan, Mohe and Mebaaz. Vedanta Fashion was India’s largest company in the Men’s Indian Wedding and Celebration Wear segment in terms of revenue and profit after tax in the financial year 2020.
- Amarjeet Maurya, AVP – Mid Caps, Angel One, said that in terms of valuation, the post-issue TTM P/E is 84.4x (at the upper price band of the issue), which is Vedanta Fashions Ltd’s historical top-line CAGR of 10 in FY18-20. % is higher than . He further added, “However, Vedanta Fashions Limited has a high operating margin, asset-light business, strong brand and a wide range of products.” Despite this, he has given a neutral rating to this issue.
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Company related details
- The “Manyavar” brand of Vedanta Fashions has a pan-India presence. The company is a category leader in the branded Indian wedding and celebration wear market.
- Other brands of the company include Twamev, Manthan, Mohey and Mebaz.
- As of June 30, 2021, the company has a retail network with 537 Exclusive Brand Outlets (EBOs), which includes 55 shop-in-shops globally.
- It has 12 overseas EBOs in the United States, Canada and the United Arab Emirates, countries with a large Indian diaspora.
- The company said in the draft paper, “We want to expand our retail network and product reach by entering new areas including Tier-II and Tier-III towns and cities in India. We believe that these markets provide growth opportunities for us.”
(Article: Surbhi Jain)
(The stock recommendations given in the story are those of the respective research analyst and brokerage firm. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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