Saraswati Saree Depot IPO subscription status: On the third day of bidding, the huge reaction from retail investors trailed behind the non-institutional investors, who continued to lead the subscription numbers. Saraswati Saree Depot IPO subscription status was 107.52 times, according to BSE data.
The initial share sale received bids for 1,07,52,43,050 shares against 1,00,00,800 shares on offer, as per BSE data.
The non-institutional investor segment received 358.65 subscriptions, while the retail investor category received 61.88 subscriptions. Qualified Institutional Buyers (QIBs) received a quota that was 64.12 times subscription.
On Tuesday, the second day of subscriptions, Saraswati Saree Depot, a significant player in the wholesale saree market, got 16.34 times subscriptions to its initial public offering.
While the retail investor category saw 20.30 times subscriptions, the non-institutional investor part received 57.18 times subscriptions. QIBs received a quota that was 1.32 times subscription.
Despite the muted market circumstances on Monday, Saraswati Saree Depot Ltdhad a good launch with the retail and non-institutional investors part being completely subscribed. Saraswati Saree IPO subscription status was 4.37 times, on the first bidding day.
The portion for retail investors attracted 5.39 times subscription while the quota for non-institutional investors got subscribed 12.62 times. The QIB portion has been booked 1.19 times.
Saraswati Saree Depot IPO has reserved not more than 50% of the shares in the public issue for QIB, not less than 15% for NII, and not less than 35% of the offer is reserved for retail investors.
The issue has set its price band in the range of ₹152 to ₹160 per equity share of the face value of ₹10 each. The offering, which ends on Wednesday, August 14, allows investors to place bids for up to 90 shares, or multiples of that number.
Established in 1966, the Kolhapur-based company first concentrated on the saree sector. These days, it also offers a wide range of women's clothes in bulk, such as bottoms, lehengas, kurtis, dress materials, and blouse pieces.
By procuring sarees from several makers around India, the company has developed relationships in important towns including Surat, Varanasi, Mau, Madurai, Dharmavaram, Kolkata, and Bengaluru.
The brokerage claims that the business would list at a P/E of 21.46x with a market size of ₹634 Cr, taking into account the FY24 EPS of ₹7.46 on a post issue basis. In comparison, its rivals, Go Fashion (India) Ltd and Sai Silks (Kalamandir) Limited, are trading at P/E of 70x and 23.9x, respectively.
Due to the company's varied product range and diversified supplier and customer base, the brokerage has granted a "Subscribe" grade to its initial public offering. In addition, it is reasonably priced when compared to its competitors.
The brokerage claims that Saraswati Saree Depot, which has a wide range of suppliers and clients, is a leading force in the wholesale saree market. It has a competitive edge because to its large product selection, which includes over 300,000 SKUs, and its bulk buying capabilities. Even though the business has continued to be profitable, negative cash flow is still a problem.
The wholesale saree market is very seasonal, has thin margins, and is extremely competitive and fragmented. Saraswati Saree Depot's P/E valuation of 17.93x is appropriate in spite of these difficulties. We advise investors with a high tolerance for risk and a long investment horizon to consider this IPO, taking into account the competitive environment, industry trends, and cash flow problems.
The promoter group's offer for sale (OFS) of 35 lakh equity shares and a new issue of up to 65 lakh equity shares make up the IPO.
The IPO size is set at ₹160 crore at the upper end of the price range. The firm intends to cover working capital needs and other corporate objectives using the net proceeds from the new issuance. Bigshare Services is the issue registrar, while Unistone Capital is the book running lead manager for the offer.
The shareholders being sold by the promoters are Tejas, Amar, Shevakram, and Sujandas Dulhani, each of whom is offering 700,200 equity shares. 350,100 equity shares each are being sold by Tushar and Nikhil Dulhani.
Saraswati Saree IPO GMP today is +80. This indicates Saraswati Saree share price were trading at a premium of ₹80 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Saraswati Saree share price was indicated at ₹240 apiece, which is 50% higher than the IPO price of ₹160.
Today's IPO GMP indicates higher and anticipates a solid listing based on the activity of the grey market over the past seven sessions. According to investorgain.com experts, the lowest GMP is ₹20 and the maximum GMP is ₹80.
'Grey market premium' indicates investors' readiness to pay more than the issue price.'
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
