This week a flurry of IPOs are opening for subscription. Among the 10 IPOs opening for bidding this week, one mainboard issue is gaining notable traction in the grey market. GNG Electronics – scheduled to open for subscription on July 23, the IPO is already making waves in the unofficial market. The sharp rise in its Grey Market Premium (GMP) might have drawn many investor attention. But the main question remains – what exactly is powering this surge?
Let’s take a look at the key factors driving the GMP buzz and what investors should know before the issue opens.
GNG Electronics IPO: Grey market buzz – A 39% listing pop?
The grey market is abuzz with GNG Electronics shares trading at a premium of Rs 92 per share. This suggests a potential listing price of Rs 329, nearly 39% above the IPO’s upper price band of Rs 237.
While GMP is not an official indicator, it often reflects the broader sentiment around an IPO.
GNG Electronics IPO: IPO opens July 23 – What you need to know
The GNG Electronics IPO will open for subscription from July 23 to July 25, with the listing tentatively set for July 30 on both BSE and NSE. The issue size stands at Rs 460.43 crore, consisting of a fresh issue worth Rs 400 crore and an offer for sale (OFS) of Rs 60.43 crore.
The price band is fixed between the range of Rs 225 to Rs 237, and retail investors can bid in lots of 63 shares, requiring a minimum investment of Rs 14,175.
GNG Electronics IPO: Key players of the issue
Another factor that is also noteworthy of this issue is the presence of Motilal Oswal Investment Advisors as the book-running lead manager. Backed by a track record of handling IPOs, it also adds another layer to the issue. Bigshare Services is the registrar for the IPO.
GNG Electronics IPO: Objectives of the issue
GNG Electronics plans to use the money raised from its IPO mainly to reduce its debt burden. A major portion, that is, Rs 3,200 million will go towards repaying or prepaying certain outstanding loans taken by the company and its key subsidiary, Electronics Bazaar FZC. The remaining funds will be directed towards general corporate purposes.
“On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted a total income/net profit of Rs. 662.79 cr. / Rs. 32.43 cr. (FY23), Rs. 1143.80 cr. / Rs. 52.31 cr. (FY24), and Rs. 1420.37 cr. / Rs. 69.03 cr. (FY25). This indicates the ongoing trends and likely prospects for this refurbishing of IT devices segment. The company has average RoNW of 30.68%. If we attribute FY25 annualized earnings then the asking price is at a P/E of 39.17. Based on FY24 earnings, the P/E stands at 51.63,” the brokerage firm Bajaj Broking noted in its IPO report.
About the company
GNG Electronics (GEL), the company behind the brand “Electronics Bazaar,” stands as India’s largest refurbisher of laptops and desktops, and one of the biggest refurbishers of ICT devices globally. The company has a footprint across India, the US, Europe, Africa, and the UAE. It follows a unique “repair-over-replacement”. As of FY25, it holds the title of India’s largest Microsoft-authorized refurbisher by capacity. It also partnered with India’s second-largest software company to manage their used IT assets.