S D Retail is a leading sleepwear-focused company, offering a stylish and comfortable range under the brand name "SWEET DREAMS". It caters to every aspect of downtime for the entire family. Since its inception, S D Retail has focused on designing, manufacturing, outsourcing, marketing, and retailing sleepwear, celebrating the transition from work to home life.

The S D Retail IPO is a Book Built Issue amounting to ₹64.97 Crores, comprising a fresh issue of 49.6 Lakh Shares. The IPO subscription period opens on September 20, 2024, and closes on September 24, 2024, with shares expected to be listed on the NSE SME by September 27, 2024.

The share price band is set between ₹124 to ₹131, with a minimum lot size of 1,000 shares. Retail investors must invest at least ₹131,000, while High-Net-Worth Individuals (HNIs) are required to invest a minimum of ₹262,000 (2 lots).

As of 12:12 PM on 23 September 2024, the live subscription status reveals that the IPO has been subscribed 3.79 times on its second day of subscription.

Grey Market Premium (GMP): The S D Retail IPO is showing a Grey Market Premium (GMP) in the range of ₹5 to ₹10, indicating potential listing gains of 5% to 10%. However, it is essential to approach GMP with caution as it is influenced by supply and demand in an unregulated environment, which can sometimes lead to skewed predictions.

Anchor Investors Report: S D Retail has raised ₹18.49 Crores from anchor investors at a price of ₹131 per share. A total of 14,12,000 shares were allocated to the anchor investors.

The IPO allotment date is set for September 25, 2024. Investors can check their allotment status online by visiting the registrar's website, selecting S D Retail IPO, and entering their application details.

Objectives of S D Retail IPO: The proceeds from the IPO will be used for the following purposes:

₹1648.85 Lakhs for setting up new exclusive brand outlets (EBOs).

₹3500.00 Lakhs for working capital requirements.

General corporate purposes.

Financial Overview: S D Retail's revenue from operations has grown steadily, with revenues for the fiscal years 2024, 2023, and 2022 reported at ₹16,328.48 Lakhs, ₹13,568.86 Lakhs, and ₹12,873.65 Lakhs, respectively. The EBITDA for the same periods were ₹1,334.80 Lakhs, ₹760.85 Lakhs, and ₹1,363.21 Lakhs. The Profit after Tax was ₹759.76 Lakhs in FY24, showing steady growth from ₹430.17 Lakhs in FY23.

For the IPO, the company is offering shares with a pre-issue EPS of ₹5.52 and a post-issue EPS of ₹4.05. The pre-issue P/E ratio stands at 23.73x, while the post-issue P/E ratio rises to 32.34x. The company's ROCE for FY24 is 15.61%, and ROE for FY24 is 6.29%. Based on these metrics, the IPO appears to be fairly priced.

Given the financial performance, valuation, and modest Grey Market Premium, we recommend investors to avoid the S D Retail IPO for both listing gains and long-term investment.

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