Studds Accessories IPO subscribed 5x on Day 2, GMP signals decent listing: Should you apply?

Studds Accessories IPO Day 2

The initial public offering of Studds Accessories continued to see strong investor interest on its second day of public bidding (October 31). The Rs 455.5-crore IPO has been subscribed more than 5 times its offer size (270 percent) on Day 2.

The maiden public issue of the helmets manufacturer received bids for more than 2.77 crore shares, as against the offer size of 54.5 lakh shares, according to data on NSE. The portions kept for retail and Non-Institutional Investors (NII) have been booked more than 6 times (602 percent) and nearly 10 times (961 percent) respectively. Qualified Institutional Buyers (QIBs) have booked 4 percent of their reserved portion.

Ahead of listing, the unlisted shares of the company were trading with 10.77 percent grey market premium (GMP) over the IPO price, according to data on Investorgain. This is higher than the 9 percent GMP quoted by the site a day before the IPO opened for public bidding.

According to IPO Watch, the unlisted shares of the company were trading with 11.45 percent GMP over the IPO price.

The company launched its IPO to raise Rs 455.59 crore entirely through an offer for sale (OFS) of 0.78 crore shares by promoters and other selling shareholders at a price band of Rs 557-585 per share. Its IPO will remain open between October 30 and November 3.

Investors can bid for a minimum of 25 shares, requiring an investment of Rs 14,625 at the upper price band, and in multiples thereafter. The allotments will likely be finalized by November 4, and the shares are scheduled to be listed on stock exchanges BSE and NSE on November 7.

Studds Accessories is India’s largest two-wheeler helmet company by revenue and the world’s largest by volume. At the upper price band of Rs 585, Studds is valued at a P/E of 33.05x based on FY25 earnings. This makes the issue fully priced, but justified considering its steady growth trajectory, brand dominance, and future expansion plans, said Swastika Investmart in its IPO note, while assigning a ‘Subscribe for long-term’ rating for the public issue.

Mater Capital Services meanwhile said that the company is well-positioned to benefit from the sector’s ongoing expansion. “The company plans to strategically expand into new markets an such as Vietnam, Peru, Egypt based on opportunities and synergy with existing business and geographies. Investors may consider the IPO as a potential long-term investment opportunity,” it added.

Choice Equity Broking also assigned a ‘Subscribe’ rating for the IPO, stating that the IPO appears fairly priced. “Its dominant market position, strong brand recall, and growing presence across domestic and international markets, couples with favorable industry tailwinds and consistent financial performance, position it well for sustainable growth,” it said.

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