Exicom Tele Systems IPO GMP Update: Grey Market Indicates Potential Listing Price of ₹321 Per Share, Say Market Observers.
Exicom Tele Systems Limited’s initial public offering (IPO) commenced on February 27, 2024, and is set to conclude on February 29, 2024. After just two days of bidding, the IPO has garnered significant attention from investors, being oversubscribed by 27.78 times. Additionally, as the bidding period draws to a close, the grey market sentiment remains optimistic, with the Exicom Tele Systems IPO commanding a substantial grey market premium (GMP) of ₹179 per share. This notable premium reflects a considerable increase of 126 percent over the IPO price range of ₹135 to ₹142 per equity share, according to observations from stock market experts.
Today, the grey market premium (GMP) for Exicom Tele Systems IPO has reached ₹179, marking a notable increase of ₹9 compared to Wednesday’s GMP of ₹170. Despite significant selling pressure witnessed in the secondary market yesterday, the surge in Exicom Tele Systems IPO GMP today suggests a bullish sentiment prevailing in the grey market. Analysts attribute this uptick to the robust response from investors, indicating high demand and positive expectations for the IPO.
The subscription status of the Exicom Tele Systems IPO after two days of bidding reveals overwhelming demand, with the overall subscription reaching 27.78 times. The retail portion of the public offer has been particularly popular, witnessing a subscription rate of 64.79 times. Meanwhile, the Non-Institutional Investor (NII) portion has been subscribed 54.39 times, and the Qualified Institutional Buyer (QIB) portion has been subscribed 4.48 times.
As of 10:54 AM on day 3 of bidding, the subscription numbers have further increased, with the public issue now oversubscribed by 33.67 times. The retail portion remains highly sought after, with a subscription rate of 75.10 times. The NII portion of the book build offer has surged to 70.11 times, while the QIB segment stands at 4.55 times oversubscribed.
Rajan Shinde, Research Analyst at Mehta Equities, suggests a “subscribe” tag for the Exicom Tele Systems IPO primarily for potential listing gains. Shinde notes that the company exhibited robust growth in FY2022 with a 64.3% increase in revenue, followed by a -16% decline in FY2023. However, in terms of net profit, Exicom Tele Systems demonstrated significant growth in FY2022 and FY2023, recording 49% and 23.9% respectively.
On valuation, Shinde highlights that at the upper band of ₹142, the IPO implies a market capitalization of ₹1716 crores. Considering the fully diluted post-IPO paid-up capital and annualized FY2024 earnings, the company’s price-to-earnings ratio (P/E) stands at 31.2x. Shinde believes this valuation appears fully priced, considering the revenue decline and EBITDA margin pressure witnessed in FY2023.
Despite this, Shinde remains optimistic about the potential for listing gains, citing the growing demand and growth in the EV solution market. He emphasizes Exicom Tele Systems’ early entry into EV charger manufacturing, strategic partnerships with automotive OEMs, and charging station operators, which solidify its market leadership position in the new age EV segment. Consequently, Shinde recommends investors to “subscribe” to the IPO, primarily for listing perspective due to the company’s leadership position and growth potential in the EV sector.
Arun Kejriwal, Founder of Kejriwal Research and Investment Services, anticipates significant listing gains from the Exicom Tele Systems IPO. He notes that the public issue has garnered a robust response from investors across various segments and has been priced at attractive valuations. However, Kejriwal acknowledges that the company’s business model may be slightly challenging for retail investors to comprehend.
Given this perspective, Kejriwal advises primary market investors to consider applying for the IPO, primarily to capitalize on the potential listing premium. He suggests that even if investors find the business model complex, participating in the IPO could still yield favorable listing gains. Therefore, Kejriwal encourages investors to at least apply for the IPO to leverage the expected listing premium.
Disclaimer: The views and recommendations mentioned above are those of individual analysts or broking companies, and do not represent the views of Bystox. We encourage investors to consult certified financial experts before making any investment decisions.