India’s major consumer durable appliance manufacturer, Amber Enterprises had a stellar debut on the exchanges, as the shares listed at Rs 1,180 on BSE as against the issue price of 859, implying a premium of more than 37%. Last week, Amber Enterprises’ IPO got subscribed by a staggering 165 times as at the end of last day of bidding, backed by strong demand from non-institutional investors.
Astha Jain, Senior equity research analyst at HEM Securities said that the research house sees 30-40% upside from the the issue price of Rs 850 in the medium term. “The investors may book partial profits beyond 40% gains, as we expect 2018 to be a volatile year. We see 30-40% upside on the stock from the issue price of Rs 879 in the short-medium term,” Astha Jain of HEM Securities told FE Online.
Notably, the firm had given a subscribe rating on the issue given the strong fundamentals of the company. “The company is bringing the issue at p/e multiple of 49 on annualized H1FY18 eps at higher price band of Rs 855-859/share. Company being market leader in RAC OEM/ODM industry in India have reputed clientele with strong track record of financial performance. Looking after strong future prospects of company with decent fundamentals, we recommend “Subscribe” on issue,” the firm had said in its note.
Amber Enterprises’ IPO which planned to raise up to Rs 600 crore received bids for 81,21,94,482 shares, as against the issue size of 49,27,351 shares implying more than 165 times subscription. Earlier, Hyderabad based defense hardware supplier, Apollo Micro System’s initial public offer received a blockbuster response and got subscribed by more than 248 times, backed by strong demand across categories.
The Amber Enterprises issue saw heavy demand from non-institutional investors who bid for a total of more than 519 times their reserved quota, bidding for a total of 54.26 crore shares as against 10.45 lakh shares reserved for them. Institutions too bid heavily as their portion was subscribed by more than 175 times, as investors from the catogory bid for 24.38 crore shares as against 13.93 lakh shares reserved for them.
Brokerage firm Angel Broking had given a subscribe rating on the given in the near- medium period. “At the upper end of the price band, the P/E multiple works out be 80x (pre issue equity base) of FY17 EPS which prima facie looks on the higher side. However, considering future earnings growth trajectory to be very robust (FY19 earnings expected to be 4x of FY17 earnings); we feel that the stock would trade at ~22-25x (post issue equity base) on our rough EPS for FY2020 which looks very attractive. Its closest peer – Dixon Technologies is trading at higher valuation of 30x FY20 earnings. We recommend ‘SUBSCRIBE’ on the issue for a mid-to-long term period,” the firm had noted.