Varmoro makes modest debut

Varmoro makes modest debut

By Ruma Dubey
about 6 days ago

Varmora Granito made a modest listing debut today, with the stock opening at Rs. 152 on the BSE against its IPO price of Rs. 148. It later touched an intraday high of Rs. 163.45, but cooled off to Rs. 152.25, still up Rs. 4.25 or around 2.9% over the issue price. The NSE listing was reported at Rs. 155, implying a premium of about 4.7–5% over the IPO price.

Trigger

  • Varmora Granito listed today, September 29.
  • IPO price was fixed at Rs. 148 per share.
  • BSE opening was Rs. 152, while NSE listing was reported around Rs. 155.
  • Issue size was around Rs. 708 crore.
  • The issue was a fresh issue plus OFS.
  • IPO subscription was modest at 1.58 times.
  • QIB portion was subscribed 3.6 times, HNI 0.92 time and retail 1 time.
  • SPTulsian IPO view was: “Very Pricey.

Varmora Granito is a 23-year-old Rajkot, Gujarat based manufacturer of vitrified tiles, across 9 plants with aggregate installed capacity of 54 million square meters per annum (sq mtr pa). Of this, 8 plants are located in Morbi, Gujarat, highlighting risk of high input prices due to West Asia crisis, besides high geographic risk.

Our conclusion in the IPO Analysis - Varmora Granito IPO pricing is aggressive for company’s weak financials. Hence avoid the IPO.