Campus Activewear, the largest sports and athleisure footwear brand in India, is likely to start the day on May 9, at least with 15 percent premium on the bourses despite market volatility, say experts citing overwhelming response from investors to IPO, robust product portfolio with strong brand recognition, and bright prospects with rising market share.
The company has raised Rs 1,400 crore through its public issue that was subscribed 51.75 times during April 26-28 as all kind of investors participated in the offer.
Qualified institutional buyers, who are generally medium to long term investors, showed strong interest in Campus IPO, putting in bids 152 times the allotted quota, followed by non-institutional investors whose reserved portion subscribed 22.25 times. Retail investors bought shares 7.68 times the portion set aside for them, and employees 2.11 times.
"Campus Activewear listing could be in the range of Rs 360-370. As grey market premium indicating Rs 61-71 premium on issue price. This premium makes a yield of 25-27 percent on the issue price," Harshad Gadekar, Research Analyst at GEPL Capital told Moneycontrol.
The reason for its premium listing linked to the response by investors in primary market, he said.
Analyst believes despite recent challenging condition in markets, this strong primary market response could be seen on listing day as well.
Click Here For All Live Updates on LIC IPO
Specifically in last one month, the market situation has worsened barring intermittent bouts of buying. The BSE Sensex and Nifty50 corrected more than 9 percent and investors lost more than Rs 18 trillion of wealth in last one month amid the beginning of policy tightening by RBI and expected faster rate hikes by Federal Reserve in coming policy meetings to tame inflation, and Ukraine war and western sanctions on Russia.
Prashanth Tapse, Vice President (Research) at Mehta Equities said one can see a decent premium listing gain around 15-18 percent in Campus debut despite high volatility in market sentiments as the brand enjoys a virtual monopoly in the sports and athleisure footwear segment backed by bright prospects ahead with rising market share.
The offer was also well respected by all kinds of investors with strong subscription figures which gives support for better listing prospects, he added.
Campus' trading premium in the unlisted market (grey market) declined to Rs 60 per share on May 7, down from Rs 95 on May 4 as per the IPO Watch. The volatility and correction in secondary markets is one of key reasons for this fall in grey market premium.
Campus Activewear, the largest sports and athleisure footwear brand in India in terms of value and volume in fiscal 2021, had an approximately 15 percent market share in the branded sports and athleisure footwear industry in India by value for FY20, which increased to approximately 17 percent in FY21.
The company's product portfolio is extensive with 1,433 active styles for men, 241 active styles for women and 485 active styles for kids and children as on December 2021.
It also has expansive pan-India reach that enabling them to sell 13 million and 13.65 million pairs in FY21 and 9MFY22, respectively.
Saurabh Joshi, Research Analyst at Marwadi Financial Services expects a listing premium of 20 percent for Campus on Monday, while Astha Jain, Senior Research Analyst at Hem Securities expects Campus to list at 15-20 percent premium over issue price.
Campus recorded a massive 403.4 percent year-on-year growth in consolidated profit at Rs 84.80 crore for nine months period ended December 2021, on a revenue of Rs 841.8 crore that increased by 93 percent in the same period.
However, the full year (FY21) profit fell 57 percent to Rs 26.86 crore and revenue declined 2.8 percent to Rs 711.3 crore compared to previous year impacted by Covid-led lockdowns.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
