The Orkla India IPO appears to have had a decent subscription start today, while the D-Street is abuzz with several more IPOs on the horizon. The Studds Accessories IPO will enter the fray tomorrow, followed by the Lenskart Solutions IPO on Friday. Investors might be curious about which opportunities to pursue with so many choices available. Let’s examine the grey market premiums trends and insights from experts.
Orkla IPO GMP is ₹77. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Orkla India share price was indicated at ₹807 apiece, which is 10.55% higher than the IPO price of ₹730.
Studds Accessories IPO GMP today is ₹55. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Studds Accessories share price was indicated at ₹640 apiece, which is 9.40% higher than the IPO price of ₹1,375.
Lenskart IPO GMP today is ₹66. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Lenskart share price was indicated at ₹468 apiece, which is 16.42% higher than the IPO price of ₹402.
Orkla IPO vs Studds Accessories IPO vs Lenskart IPO – Which one should you buy?
Arun Kejriwal, the founder of Kejriwal Research and Investment Services, stated that the Orkla India IPO, Studds Accessories IPO, and Lenskart Solutions IPO cannot be directly compared.
According to Kejriwal, Orkla India specializes in spices and ready-to-eat foods and is going public as a brand owner, manufacturer, and marketeer. Studds produces helmets and faces limited competition, standing as a major player in its field. While there are three or four branded competitors, Studds still holds a larger market share compared to them. The industry benefits from favorable trends, particularly given the low penetration of helmets in the country. The business model is straightforward, and although its exports are modest, Studds is a reasonably sized player with a solid market share. Additionally, the IPO is being offered at a competitive price relative to the Nifty 50 and the market overall, though it is entirely an Offer for Sale (OFS) and smaller in scale compared to many other offerings.
For Orkla India, the issue size is considerably larger, around 1,600 crores, and it is also entirely an OFS. It could be deemed a bit pricey, especially given that the spices and ready-to-eat food sector is highly competitive, with no single firm enjoying a dominant market share.
Turning to Lenskart IPO, the grey market activity for its shares has been extremely volatile. The company holds a single-digit market share, and the business landscape is competitive. They are innovating by introducing a quality and affordability approach in a structured manner, with their unique selling proposition being a buy one, get one free offer, said Arun.
Lenskart IPO encompasses three main aspects: it functions as a specialized logistics company, operates as a tech-enabled firm, and provides eyewear products.
Now, regarding valuation, Lenskart IPO valuation is not cheap by any means; it is, in fact, on the higher side. We can evaluate this based on several metrics, including the price-to-earnings (PE) ratio derived from earnings per share (EPS) and the revenue compared to market capitalization.
The company’s revenue stands at approximately 6,500 crores, and at the upper end of its price range, it would be valued at around 70,000 crores, translating to a revenue multiple close to 10.5 or thereabouts.
There are numerous options available in the market, with more IPOs expected to follow. The historical performance of recent IPOs has not been particularly promising, and we have observed some solid IPOs trading at significant discounts from their highs shortly after listing. Thus, investors should exercise caution and not become overly excited. This might be a critical moment to decide.
“Among the options, Studds Accessories IPO emerges as the safest choice, resonating most with regard to pricing and valuation. Although the issue is small and lacks excessive hype, it features a clear-cut business model, suggesting limited risk. Consequently, potential gains in this company seem reliable. In contrast, the prospects for the others remain uncertain,” said Arun Kejriwal.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
