Patel Retail shares likely to make premium listing on Aug 26, experts recommend a post-listing strategy

Patel Retail shares likely to make premium listing on Aug 26.

Patel Retail shares are expected to make a premium debut on stock exchanges on August 26 after its initial public offering (IPO) drew strong investor interest with 95.70 times subscription between August 19 and 21.

The company had set a price band of Rs 237-255 per share for the offer and raised over Rs 43 crore from anchor investors ahead of the issue.

Patel Retail IPO sees strong demand on final day of subscription, booked over 96 times - Check latest GMP

Headquartered in Ambernath, Maharashtra, Patel Retail runs a value retail supermarket chain under the brand ‘Patel’s R Mart’. It operates 43 stores across Thane and Raigad districts with a total retail area of about 1.79 lakh sq ft. Incorporated in 2008, the company has also diversified into food processing, packaging, exports and trading, selling products under in-house labels such as Patel Fresh, Indian Chaska, Blue Nation and Patel Essentials.

Narendra Solanki, Head Fundamental Research – Investment Services, Anand Rathi Shares and Stock Brokers, said, "We expect the company to list at a premium to its issue price, given the current Grey Market Premium. At the upper price band, the company is valued at a FY25 P/E of 33.6x with a post-issue market capitalisation of Rs 8,504 million. Investors may consider booking partial profits on listing and holding the rest for long term."

Each retail store of the company offers more than 10,000 stock keeping units (SKUs), with focus on value-for-money pricing, strong customer service and operational efficiency, he added.

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Akhilesh Desai, Research Analyst at Ajcon Global Services Ltd, said, "The IPO received nearly 96 times subscription and the grey market premium of around 18-20 percent indicates a positive listing. Short-term investors may look at booking gains while long-term investors may hold, depending on execution and regional expansion."

The company plans to use proceeds from the fresh issue to repay debt, meet working capital needs and for general corporate purposes.

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