Electronics Mart India IPO: What GMP signals ahead of shares listing

As per market observers, Electronics Mart India shares are commanding a premium or grey market premium (GMP) has surged to ₹30 in the grey market today, as compared to ₹24 yesterday.

The finalization of basis of share allotment of Electronics Mart India IPO has been done and all eyes are now on share listing. The company’s shares are expected to list on stock exchanges next week on Monday, October 17, 2022.

Electronics Mart India IPO consisted of a fresh issue of equity shares aggregating to ₹500 crore, with no offer for sale (OFS) component. The price range for the offer was at ₹56-59 per share. 

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

Incorporated in 1980, Electronics Mart India Ltd (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. 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 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.

“In terms of valuations, the post-issue P/E works out to 21.8x FY22 EPS (at the upper end of the issue price band) which is low compared to its peer Aditya Vision Ltd. Further, EMIL has better revenue growth (CAGR of 17%) over 2 years, better return on equity and expansion plan on the cards. Considering all the positive factors, we believe this valuation is at reasonable levels,” said brokerage Angel One in the IPO note.