Despite an unimpressive subscription of its initial public offering (IPO), Vedant Fashions, which owns the Manyavar brand, made a decent debut on the bourses on Wednesday. The stock got listed at Rs 936, an 8% premium to its issue price, and ended its first session at Rs 935 with a gain of 7.9% over its issue price. During intraday, it touched a high of Rs 993 on the BSE.
The positive performance of the stock came even as its Rs 3,150-crore IPO saw subdued response, getting subscribed by 2.57 times with retail portion getting subscribed by only 0.39%. Many analysts were expecting a discounted listing for Vedant Fashions due to concerns over its high valuation, the IPO being a complete offer for sale and ongoing geopolitical tensions that has increased volatility in the market.
Likhita Chepa, Senior Research Analyst at CapitalVia, said analysts were expecting the stock to list at a discount of 8-10%. However, owing to improving sentiments in the markets and the global peers, especially after Russia announced partial withdrawal of its troops from the Ukrainian border, a recovery was seen across sectors in the past two sessions.
Santosh Meena, Head of Research, Swastika Investmart, said the company has strong brand value with good fundamentals. Post-listing, the company commands a market capitalisation of Rs 22,688 crore.
“Investors should approach it from the long-term perspective where any dip of 15-20% from current levels will be a good buying opportunity. Those who applied for listing gain should maintain a stop loss of Rs 890,” said Meena.