Vedant fashion IPO: Most likely to fail

Vedant fashion IPO: Most likely to fail

Manyawar’s parent business, Vedant Fashion, has scheduled an Initial Public Offering (IPO) on February 4, 2022, with an IPO closing date of February 8, 2022. If you wish to apply for the IPO, you can do it today which is the last day to do so. The IPO’s is launched keeping in mind to sell up to 3.63 cr. Equity shares to investors. The shares subscription was only 0.14 times on the first day of IPO and today it is subscribed for only 0.21 times.

Vedant Fashions’ Initial Public Offering (IPO), best known for its Manyavar brand of wedding and festivities clothing, has seen a lukewarm response so far, with only 16 percent shares subscribed by the morning of February 7, the second day of bidding.

 

Investors only applied for 40.72 lakh Equity Shares out of a total of 2.54 crore units of the IPO.

 

IPO time line

IPO Open Date                                                  Feb 4, 2022

IPO Close Date                                                  Feb 8, 2022

Basis of Allotment Date                                      Feb 11, 2022

Initiation of Refunds                                           Feb 14, 2022

Credit of Shares to Demat Account                      Feb 15, 2022

IPO listing Date                                                  Feb 16, 2022

Manyawar’s parent firm, Vedant Fashions Limited, is headquartered in Chennai, India. The organisation was established in 2001 and is known for bringing the customers Indian ethnic outfits that are tailor-made and designed with utmost care. Customers can visit the organisation to place orders for festive wear. The organization’s products are aimed at the wedding apparel industry. Custom-made Festives wears are also made available at the stores for religious functions. The organisation is known to provide the best product designs at the best price.

Some of the company’s brands include I Manyavar, (ii) Mohey, (iii) Mebaz, (iv) Manthan, and (v) Twamev.

A Huge part of of the company’s revenue comes from franchise-owned exclusive brand outlets (EBOs), with the rest coming from multi-brand outlets (MBOs), large format shops (LFSs), and online platforms including its website (www.manyavar.com) and mobile application.

Vedant Fashions Limited provides a wide variety of products for the Indian market. Customers can come to the organisation for a one-stop shopping experience.

The organisation has a large Network of distributors spread over India and across the entire world to ensure the timely delivery of customised products. The Public Limited company also makes extra efforts of tailoring the products to fit the specific requirements of the customers.

 

Vedant Fashions was the largest in India in the men’s Indian wedding and Occasional wear market in terms of sales, OPBDIT, and profit after tax for the Financial Year 2020.

Details about the IPO

IPO opening Date         Feb 4, 2022

IPO closing Date            Feb 8, 2022

Issue type                     Book built Issue IPO

Face value                    Rs. 1 per Equity Share

IPO price                     Rs. 824 to Rs. 866 per Equity Share

Market lot                    17 shares

 

The minimum Order Quantity for these shares is 17. These shares will be traded on the NSE and BSE.

The issuance price for 36,364,838  shares is Rs.1 per share. The  shares would be priced between Rs 824 and Rs 866 per share, with a total value of Rs 3,149.19 crores.

To buy one lot, you’ll need a minimum of Rs.14,722.

The Net proceeds will be utilised to take advantage of the benefits of listing the  shares on Stock Exchanges, and  to fulfil the selling shareholders’ Offer for Sale of up to 36,364,838 shares.

Out of the Potential Issue

50% is reserved for QIB Qualified Institutional Buyers

35% was reserved for Retail public

15% was reserved for HNI. HNI stands for High Net-worth Individual.

On 05.02.2022

Grey market premium was Rs. 36 

Application rates- Rs. 300

Subject to trades- Rs. 450 (No Traders)

the share subscription is only 0.14 times

If we add today’s GPM that is Rs. 36 to Share price of Rs 866 it comes to a total of Rs.902

The price of the listing comes to Rs 902.

This way it is trading at only 5% premium

On 07.02.2022

Grey market premium was Rs. 12

The updated GRM on 07.02.2022 is down to Rs. 12 at current date which was started from Rs.100. and the shares are subscribed only 0.21 times

The QIBs, HNIs and retailers has not fulfilled their respective quotas.

According to the statistics, this IPO is most likely to fail, although it is a well-known brand, and things may change even on the last day of the IPO, February 8, 2022. If you are willing to accept risks, go ahead and subscribe for the shares in this IPO; otherwise, stay away.

The grey market premium (GPM) is the price at which grey market IPO shares are sold before they are listed . in simple words the stock of the company that issued  at the Initial Public Offering (IPO) is bought and sold outside of the stock market.

Other important details about the Company:

The company’s retail locations are in India’s high-growth towns and cities, where it has developed  EBOs ,MBOs, and LFSs to meet the needs of the country’s changing lifestyles. Bangalore, Gurugram, Indore, Mumbai, Mysuru, Patna, Pune, Vadodara, Vapi, and Vijayawada are included in these emerging markets.

In the festive clothes industry, the company is a market leader. The company had a retail footprint of 1.2 million square feet in September 30, 2021, with 535 EBOs (including 55 shop-in-shops) scattered across 212 Indian cities and towns, and 11 EBOs in the US, Canada, and the UAE.

Edited and published by Ashlyn Joy