Saraswati Saree Depot IPO Open :The IPO of Saraswati Saree Depot Limited, a company engaged in the business of sarees, has opened for subscription today on 12 August 2024. It can be subscribed till 14 August. The size of the IPO is Rs 160.01 crore. The company has fixed the price band for the IPO at Rs 152 to Rs 160 per share. The minimum lot size with one application is 90 shares. The minimum investment for retail investors is Rs 14400. Shares will be allotted in the IPO on August 16, while its listing is on August 20.
Saraswati Saree Depot IPO Latest GMP
There is a lot of activity in the grey market regarding Saraswati Saree’s IPO. Today, on the day of issue opening, the unlisted stock of the company is at a premium of Rs 35. This premium is 22 percent in terms of the upper price band of Rs 160.
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Canara Bank Securities has recommended subscribing to the IPO. According to the brokerage, Saraswati Sarees now plans to enter the ethnic wear space for men due to the growing trend of multi-day weddings, acceptance of traditional apparel during the festive season and emerging as a major brand in the Indian wedding and celebration wear market. The company has shown impressive financial performance, with EBITDA margin improving to 6.73 per cent in FY24. The company’s RoNW of 45.49 per cent and RoCE of 64.46 per cent are well above the industry average. It is attractively valued compared to its peers.
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Brokerage house SMIFS has also advised to subscribe to the IPO. According to the brokerage, the company serves its 13,000 customers, which is expected to grow in the future through its e-commerce initiative, while it is expected to benefit from growth in the saree market. Organized retailers are specifically targeting the saree market with mid to premium range offerings. This growth is reflected in the growth in the company’s average net sales per customer. However, the saree business is stable and new ventures in men’s ethnic wear may improve future growth rates with cheaper valuations.
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Saraswati Saree Depot is a leading player in the wholesale saree market, characterized by a diverse supplier and customer base. Its extensive product portfolio and bulk buying capabilities provide a competitive edge. Although the company has maintained stable profitability, negative cash flow remains a concern. The saree wholesale industry is highly competitive, with challenges such as low margins and seasonality. Despite these challenges, Saraswati Saree’s P/E valuation of 17.93 times looks reasonable. Considering the industry dynamics, competitive environment and cash flow concerns, risk-taking investors are advised to subscribe for the long term.
Size of Saraswati Saree Depot IPO
The IPO consists of a fresh issue of up to 65 lakh equity shares and an offer for sale (OFS) of up to 35 lakh equity shares by the promoter group. At the upper end of the price band, the fresh issue is valued at around Rs 104 crore, while the OFS is valued at Rs 56.02 crore. At the upper end of the price band, the total issue is valued at Rs 160 crore. Under the OFS, Tejas Dulhani, Amar Dulhani, Shevkram Dulhani, Sujandas Dulhani, Tushar Dulhani and Nikhil Dulhani will sell their respective stakes.
Saraswati Saree Depot IPO: How much reserve for whom
About 50 per cent of this IPO is reserved for qualified institutional buyers (QIB). In this, 35 per cent is reserved for retail investors. While 15 per cent is reserved for non-institutional investors (NII). The company intends to use the funds raised from the new issue for working capital needs and general corporate purposes.
(Disclaimer: Investing or selling stocks is advised by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert advice before investing.)
