The stock opened with a 33.3% premium at Rs 104 on the NSE and a premium of 41% on the BSE at Rs 110.
Despite the offer being entirely an OFS, Vishal Mega Mart received healthy demand from all sets of investors, especially from the QIB category who bid more than 85 times, while retail investors had shown less interest due to OFS concerns.
Additionally, Since the IPO was an OFS, the company will not receive any proceeds from the issue.
Post listing, here is what analysts say about the stock:
“Vishal Mega Mart’s IPO saw a strong debut on the stock market with a 3.33% listing gain, opening at Rs 104 compared to its issue price of Rs 78. This positive momentum can be attributed to its strong subscription of 28.75 times, reflecting high investor demand. The company’s position as a leading offline retailer, consistent financial performance, and reasonable valuation resonated well with investors,” said Shivani Nyati, Head of Wealth at Swastika Investmart.
However, given that this was a complete offer for sale (OFS), it should be noted that there are no direct benefits to the company, making it a play purely on market sentiment and its growth story in the retail sector.
“Investors are advised to book profits at this level, while those looking to hold should maintain a stop loss at around Rs 95,” Nyati added.
Further, analysts at Bajaj Broking highlight that over the past three fiscal years, the company has posted an average EPS of Rs. 0.82 (basic) and an average RoNW of 6.85%. The issue is priced at a P/BV of 5.94 based on its NAV of Rs 13.14 as of September 30, 2024, and post-IPO NAV.
“We recommend to subscribe the IPO with a long-term perspective,” said the report by Bajaj Broking.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
