Electronics Mart makes strong debut, lists at 52% premium

It was an early Diwali bonanza for Electronics Mart shareholders as the shares of the homegrown electronics retailer made a strong debut on the domestic bourses at a premium of more than 50%. The equity shares of Electronics Mart India listed at ₹90 apiece on the National Stock Exchange (NSE), 52.54% higher than its issue price of ₹59. On the Bombay Stock Exchange (BSE), the stock of the consumer durables retail chain operator opened at a premium of 50.59% at ₹89.40 per share.

Post listing, Electronics Mart share price gained as much as 54.2% to hit an intraday high of ₹91 on the BSE and the NSE. It hit a low of ₹83.25 on the BSE and ₹83.30 on the NSE.

At 11:30 am, the share price was quoting at ₹85.75 on the BSE, up 45.35% against the issue price, while the market capitalisation rose to ₹3,283.83 crore. On the volume front, there was a surge in buying activities as more than 6 crore shares changed hands over the counter so far on NSE, while over 41 lakh shares traded on the BSE by the time of reporting.

The strong listing of Electronics Mart shares was in line with market expectations, thanks to attractive valuations and a positive outlook for the consumer durable sector. The stock was trading at a premium of ₹30 in the grey market, indicating a strong debut on bourses.

The ₹500-crore initial public offering (IPO) of the company received an overwhelming response from investors, especially from the institutional side, with issue subscribing by 71.93 times as it received bids for 449.53 crore shares against 6.25 crore shares. The quota for Qualified Institutional Buyers (QIBs) was subscribed 169.54 times, Non-Institutional Investors (NIIS) 63.59 times, and retail individual investors (RIIs) segment 19.71 times. The issue, which opened for subscription between October 4-7, was offered in the price band of ₹56-59 apiece.

Ahead of the IPO, the company had raised ₹150 crore through anchor investors by allocating 2.54 crore equity shares at a price of ₹59 per share, as per the filing with the exchanges. A total of 20 anchor investors participated in the issue, including Nippon Life India, HDFC TrusteeTata MF, Sundaram MF, Whiteoak Capital, Aditya Birla Sun Life Insurance, Pinebridge Global Funds, Motilal Oswal MF, Abakkus Emerging Opportunities Fund, and Mirae Asset.

The company intends to use raised capital for the expansion and opening of stores and warehouses and to meet working capital requirements. It will also repay certain of its debts through the fund raised via the issue.

Electronics Mart is 4th largest and one of the fastest growing consumer durables and electronics retailers in India and as of fiscal 2021, it is the largest regional organised player in the southern region in revenue terms with dominance in Telangana and Andhra Pradesh, the company said in its prospectus filed with market regulator SEBI.

As on August 31, 2022, the company operated 112 stores across 36 cities/urban agglomerates with more than 6,000 stock-keeping units (SKUs).  It claims to be one of the fastest growing consumer durable and electronics retailers in  India, with a revenue CAGR of 17.90% from fiscal 2016 to 2021.