Shares Rise 52.5% on Debut; Should You Buy, Sell or Hold?

Electronics Mart India Share Price on NSE, BSE: Electronics Mart India made its D-street debut today. Shares of Electronics Mart India Ltd listed at Rs 90 apiece on the NSE, a premium of more than 52 per cent as compared to its IPO issue price of Rs 59 per share, and the opening tick on the BSE was Rs 89.40. Investors made a profit of Rs 30.4 per share. The market capitalisation of the company stands at Rs 3,439 crore, according to BSE data.

The maiden public issue of Electronics Mart India was subscribed 71.93 times during October 4-7, with qualified institutional buyers buying 169.54 times the allotted quota. Retail and non-institutional investors also remained aggressive, putting in bids 19.71 times and 63.59 times the portion set aside for them.

The IPO comprises a fresh issue of equity shares aggregating to Rs 500 crore, with no offer for sale (OFS) component. The company intends to utilise the net proceeds to fund its capital expenditure and incremental working capital requirements to the extent of Rs 133.8 crore and Rs 200 crore respectively, repayment/prepayment of Rs 50 crore of its debt besides general corporate purposes. Anand Rathi Advisors Limited, IIFL Securities Limited and JM Financial Limited are the book-running lead managers to the issue and KFin Technologies Limited is the registrar to the offer.

What should investors do now?

Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd., said: “Electronics Mart India Limited has debuted at Rs.90 i.e. 53 per cent over its issue price. The company’s strong listing can be attributed to strong interest from investors, reasonable valuations, and a sanguine growth outlook. The company is the 4th largest consumer durable and electronics retailer in India with a leadership position in South India having the majority of its stores located in Telangana and Andhra Pradesh. The consumer durable and electronics industry in India is underpenetrated and has a long runway of growth. Nevertheless, the electronic and consumer durable market is extremely competitive and has been disrupted by e-commerce players. Further, the company faces significant competition from players like Reliance Retail, Croma, etc. Therefore, we advise investors to lock in listing gains and only aggressive investors should consider making a long-term commitment to the company. Those who applied for listing gains can maintain a stop loss of Rs.77.”

Electronics Mart India (EMIL) was founded by Pavan Kumar Bajaj and Karan Bajaj as a proprietary concern with a consumer durables and electronics store under the name of Bajaj Electronics. 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.

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.

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