New Delhi: Ahead of its listing on the bourses on Thursday, Sula Vineyards tended to lose its grip on the grey market with its premium dropping sharply.
The winemaker was exchanging hands at a discount of Rs 10-15 per share in the unofficial market, against the issue price of Rs 357. The company commanded a premium of Rs 70-75 apiece when the issue was announced.
The premium in the grey market was marred by the selloff in the secondary markets, rich valuations, complete OFS status and lower subscription for the issue. Analysts suggested that the issue might disappoint at the debut.
Santosh Meena, Head of Research,
, said the issue is not getting any positive response in the grey market, where it is currently trading at a discount.
“Looking at the current market conditions, it will not be fair to hope much from its listing, and we can expect a flat to negative listing tomorrow,” he added.
Sula Vineyards is India’s first pure play wine manufacturer to make its Dalal Street debut. Its flagship brand ‘Sula’ is the ‘category creator’ of wine in India.
Owing to the fact that the market is struggling at higher levels, the stock looks to list at a discount of about 5%, but in terms of long-term investment it looks good, said Ravi Singhal, CEO, GCL Securities.
Sula Vineyards raised a little over Rs 960 crore from its primary offering, which was sold in the range of Rs 340-357 per share between December 12 and 14. However, the issue was merely subscribed 2.33 times.
The quota reserved for qualified institutional buyers (QIBs) was subscribed 4.13 times while that for non-institutional investors (NIIs) and retailers was subscribed 1.51 times and 1.65 times, respectively.
Manoj Dalmia, Founder and Director, Proficient Equities, said lower promoter holdings are cause for alarm. “Investors with cash surpluses might think about investing for a long-term reward,” he added.
Incorporated in 2003, Nashik-based Sula Vineyards is India’s largest wine producer and seller. It has a bouquet of popular brands, including Sula, RASA, Dindori, The source, Satori, Madera and Dia.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
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