The Rs 413 crore IPO of the company, which was sold between January 25 and 28, was subscribed 18.03 times. However, Stove Kraft’s unlisted shares are commanding very little premium in grey market at Rs 35 apiece, compared with Rs 100 a share a week ago.
Abhay Dosh, Founder of Unlistedarena.com, expects the shares to list at par or with mild gains. “It is a risky bet, as the listed peers are performing better while the growth outlook is not sustainable,” he said.
“The IPO was buzzing amid the euphoria in the market. The company is seeking higher valuations,” said Doshi, who tracks the grey market.
The retail portion of the IPO was subscribed 26.04 times while the quota reserved for qualified institutional bidders (QIBs) got subscribed 8.02 times. The high net worth individual segment saw 32.72 times subscription.
Analysts said the IPO was priced at 34.5 times PE on a trailing basis, while peers TTK Prestige and Hawkins Cookers currently trade at 61 times and 47.5 times, respectively.
They believe the kitchen appliance maker’s brand value, margins and return on capital are lower compared with its peers. Even though the company has improved profitability on the back of cost-cutting measures of late, that trend is unsustainable.
They remain ‘neutral’ on the stock and advise only aggressive investors with high risk appetite to hold the stock. The issue was managed by Edelweiss Financial Services and JM Financial Consultants Private.
