The issue had sailed through on the second day of the bidding process, thanks to a solid response from retail buyers. Although institutional buyers have kept off the bidding process so far.
According to the data from BSE, the company fetched bids for more than 4,15,55,000 equity shares or 3.53 times as against 1,17,88,365 equity shares offered in the issue as of 11.20 am on day 3.
The portion for retail bidders was subscribed 10.76 times while non-institutional investors quota fetched 3.87 times. The qualified institutional buyers’ portion was booked 2.02 times.
The education services player is eyeing to raise Rs 200 crore via its initial public offering (IPO), which is entirely a fresh issue, by selling its shares in the range of Rs Rs 130-137 per share.
The company has reserved up to 75 per cent of the total offer for qualified institutional buyers (QIBs), whereas non-institutional investors (NIIs) will get 15 per cent allocation. Retail bidders will get the remaining 10 per cent allocation.
The issue is not tracked by many brokerages, thanks to the small size. However, those tracking the offering, mostly have an ‘avoid’ rating with a word of caution to the investors.
Analysts are skeptical over the issue following the muted financials, negative bottomline, pricey valuations, tepid growth and high competition in the education sector.
On FY22 annualized financials, the IPO is at 25x market cap/sales for a loss-making company with a low track which looks expensive and the market is highly competitive, said Arafat Saiyed, Research Analyst, Reliance Securities.
“The IPO is aggressively priced and hardly leaves anything meaningful on the table for investors in the medium term perspective,” he added. “All positives are captured in its valuation and valuation is not favourable for investors.”
Currently, the company is loss-making and is forecasted to remain loss-making in the medium term, said Choice Broking with an ‘avoid’ rating for the issue.
The company offers online and offline coaching services for career-defining courses such as UPSC, Chartered Accountant, banking, and government exams to students, graduates, professionals, and corporate employees.
