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Davin Sons Retail IPO allotment date likely today. GMP, how to check allotment status
Team Finance Saathi
08/Jan/2025
What's covered under the Article:
- Davin Sons Retail IPO opens at ₹55 per share with strong Grey Market Premium of ₹8, suggesting 14.54% gain.
- Subscription status shows 114.79 times oversubscription, indicating high investor demand.
- Davin Sons Retail IPO’s objectives include funding warehouse purchase and working capital needs.
Davin Sons Retail Limited IPO is set to open on January 02, 2025, with a fixed price issue of ₹8.78 Crores. The IPO will consist entirely of a Fresh Issue of 15.96 lakh shares, priced at ₹55 per equity share. This will bring the company’s market capitalization to ₹28.94 Crores, based on the IPO price.
The company operates in two primary categories: garment manufacturing and the distribution of FMCG products. In the garment sector, Davin Sons Retail manufactures and designs readymade garments, including jeans, denim fabrics, denim jackets, and t-shirts for other brands. In the FMCG sector, the company is part of one of the largest and most sustainable industries in India, with significant growth potential driven by a rising demand for fast-moving consumer goods.
Grey Market Premium and Subscription Trends:
The Grey Market Premium (GMP) for the Davin Sons Retail IPO is expected to be ₹8, indicating a potential listing gain of 14.54%. However, it's important to note that GMP is based on unregulated market demand and cannot accurately predict the actual price discovery process post-listing. Investors should approach the Grey Market with caution as it does not reflect official market trends.
On January 6, 2025, the IPO showed 114.79 times subscription on the final day of its subscription period, a strong indicator of investor interest. The subscription figures suggest that the demand for Davin Sons Retail IPO is robust, especially in the retail investor category.
IPO Allotment Process:
The allotment date for the Davin Sons Retail IPO is January 07, 2025, with results expected to be available via the registrar’s website. To check the allotment status, investors can follow a simple process by entering their application number, PAN, or DP Client ID on the allotment status page.
Objectives of the IPO:
The proceeds from the IPO will be utilized for several key purposes:
- ₹136.00 lakh will be used for capital expenditure related to the purchase of a warehouse.
- ₹420.00 lakh will help fund the company’s working capital requirements.
- ₹189.80 lakh will be allocated to meet general corporate purposes.
These objectives indicate that the funds raised will significantly enhance the company's operational capabilities and help expand its business across the garment and FMCG segments.
Financial Performance and Valuation Metrics:
Davin Sons Retail’s financial performance has demonstrated steady growth. The company reported revenues of ₹634.10 lakh for the period ending September 30, 2024, with an EBITDA of ₹153.40 lakh. The Profit After Tax (PAT) for the same period was ₹73.59 lakh, showcasing a growth trajectory in both revenue and profitability. In the fiscal years 2023 and 2024, the company achieved ₹1,339.16 lakh in revenue and ₹164.05 lakh in PAT, respectively.
For the FY24, the company has a pre-issue EPS of ₹4.63 and a post-issue EPS of ₹3.12. The pre-issue P/E ratio stands at 11.88x, and the post-issue P/E ratio is 17.64x, both of which suggest the IPO is fairly priced compared to industry standards.
Additionally, the Return on Capital Employed (ROCE) for FY24 is a strong 54.52%, and the Return on Equity (ROE) is 49.41%, reflecting efficient use of equity capital. The Return on Net Worth (RoNW) stands at 29.58%, further reinforcing the company’s solid financial performance and market position.
IPO Investment Recommendation:
Given the strong subscription numbers, financial performance, and 14.54% GMP, Davin Sons Retail IPO presents an interesting opportunity. However, considering the company’s relatively modest P/E ratio compared to industry leaders and the fact that the listing may not yield significant immediate gains, we recommend avoiding the IPO for listing gains. Investors looking for long-term growth in the garment manufacturing and FMCG sectors may still find it a viable option.
The Upcoming IPOs in this week and coming weeks are Sat Kartar Shopping,Barflex Polyfilms.