QVC Exports IPO subscribed 7.98 times on Day 2. Check GMP and other details
Team Finance Saathi
22/Aug/2024

Key Points:
IPO Pricing and Subscription: QVC Exports IPO launches on August 21, 2024, with a share price of ₹86 and a minimum lot size of 1,600 shares.
Financial Performance: The company has shown substantial revenue and profit growth, with revenues rising from ₹12,782.50 lakhs in FY22 to ₹45,462.68 lakhs in FY24.
Market Sentiment: The Grey Market Premium suggests potential listing gains of 55-63%, making it a favorable option for both short-term and long-term investments.
QVC Exports Limited is set to launch its Initial Public Offering (IPO) on August 21, 2024. Specializing in the dealership of ferro alloys and raw materials for steel manufacturing, QVC Exports deals with products such as high carbon silico manganese, low carbon silico manganese, high carbon ferro manganese, high carbon ferro chrome, and ferro silicon. Established as a key player in the ferro alloys sector, the company provides essential materials for steel production and related industries.
IPO Details and Subscription Information
The QVC Exports IPO comprises a fixed price issue totaling ₹240.66 crores, which includes a fresh issue of 20.49 lakh shares worth ₹176.26 crores and an Offer for Sale of 7.48 lakh shares amounting to ₹64.39 crores. The share price is set at ₹86 per equity share, with a minimum lot size of 1,600 shares. Retail investors need to invest a minimum of ₹137,600, while High-Net-Worth Individuals (HNIs) are required to invest in at least 2 lots (3,200 shares), totaling ₹275,200. The subscription period will run from August 21, 2024, to August 23, 2024. Allotment of shares is expected to be finalized by August 26, 2024, with a tentative listing date on August 28, 2024, on the NSE SME platform.
Grey Market Premium and Market Sentiment
The Grey Market Premium (GMP) for the QVC Exports IPO is estimated between ₹50 and ₹55, suggesting potential listing gains of approximately 55-63%. GMP reflects the market’s perception and demand for the IPO shares before the official listing and is indicative of the anticipated trading price. However, investors should be cautious as GMP is unregulated and can fluctuate based on demand and supply dynamics.
Financial Performance and Valuation
QVC Exports has demonstrated impressive financial growth over recent fiscal years. Revenue surged from ₹12,782.50 lakhs in FY22 to ₹45,462.68 lakhs in FY24, showcasing robust expansion. EBITDA also grew significantly from ₹234.02 lakhs in FY22 to ₹1,071.42 lakhs in FY24, highlighting operational efficiency. Profit After Tax (PAT) increased from ₹123.39 lakhs in FY22 to ₹604.92 lakhs in FY24, reflecting strong profitability.
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The IPO is priced with a pre-issue EPS of ₹7.20 and a post-issue EPS of ₹5.78. The pre-issue P/E ratio stands at 11.94x, while the post-issue P/E ratio is 14.87x, compared to the industry average of 25x. The company’s ROCE for FY24 is 34.22%, and ROE is 7.20%, indicating strong returns on capital employed and equity.
The proceeds from the IPO will be allocated to the following objectives: A. Repaying Unsecured Loans: ₹109.00 lakhs will be used to settle existing unsecured loans. B. Meeting Working Capital Requirements: ₹900.00 lakhs will be utilized to support the company's working capital needs. C. General Corporate Purposes: Remaining funds will be allocated for general corporate needs and related expenses.
Given the strong financial performance and significant Grey Market Premium, the QVC Exports IPO appears to offer attractive potential for listing gains. The company’s robust revenue and profit growth, combined with a favorable GMP, suggest it could be a viable option for both short-term gains and long-term investment. However, investors should carefully consider the high valuation and consult with financial advisors before proceeding.
Conclusion
The QVC Exports Limited IPO presents a promising opportunity with substantial growth prospects and attractive listing gains. Investors interested in participating should assess their investment strategy and stay updated on the latest market trends and company performance. For more detailed information, refer to the company's Red Herring Prospectus (RHP) and consult with certified financial experts.
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