The much-anticipated IPO of Allied Blenders and Distillers Limited has made its debut on the Indian primary market today, opening the gates for investors to bid until June 27, 2024. With a price band set between ₹267 and ₹281 per equity share, the company aims to raise a substantial ₹1500 crore. This includes ₹1000 crore from the issuance of fresh shares, and the rest through offers for sale.
In the bustling world of IPOs, one crucial indicator for investors is the Grey Market Premium, and for Allied Blenders and Distillers, the GMP is currently at a notable ₹76. This premium reflects positive market sentiment and indicates that shares are trading above the IPO price in the unofficial market.
The company, a prominent player in the Indian Made Foreign Liquor segment, plans to utilize the proceeds from this public issue to pay down debt, reduce finance costs, and ultimately boost profit margins. These strategic moves are aimed at strengthening the company’s financial health and positioning it for long-term growth.
Market observers have been keenly watching this IPO, and several brokerage firms have already weighed in with their recommendations. Anand Rathi has given a “Subscribe – Long Term” rating, highlighting the promising long-term business prospects of the company despite the high near-term valuation. The firm notes that the P/E ratio stands at an eye-popping 1,405 times its FY24 annualized earnings, with a market capitalization expected to reach ₹78,596 million post-issuance. Such figures underline the company’s valuation but also emphasize its potential in a competitive industry.
BP Equities also leans towards a positive outlook, recommending that high-risk investors consider subscribing for listing gains. They point out that while the valuation on a price-to-earnings multiple front appears expensive, the strong dynamics of the alcohol industry and the company’s robust position within the IMFL landscape make it a worthy consideration. For those looking for quick returns post-listing, this IPO could offer lucrative opportunities.
On the other hand, there are more cautious voices. Swastika Investmart advises primary market investors to steer clear of this offering. Their recommendation is a stark contrast to others, reflecting the diverse opinions that characterize market sentiment. This divergence is not uncommon in the volatile world of IPOs, where potential rewards are often balanced by significant risks.
Investors must also consider logistical details. The IPO registrar is Link Intime India Private Limited, and the shares are proposed for listing on both BSE and NSE, with the listing likely to happen on July 2, 2024. The finalization of share allocation is expected on June 28, 2024, giving investors a clear timeline for their investment journey.
Ultimately, the decision to apply for the Allied Blenders and Distillers IPO hinges on individual risk appetite and investment strategy. For those with a long-term horizon and confidence in the company’s growth trajectory, the positive endorsements from firms like Anand Rathi and BP Equities provide a compelling case. Conversely, investors with a more conservative approach might heed the cautionary advice of Swastika Investmart.
As the bidding window remains open, prospective investors will continue to scrutinize every detail, weighing the potential for substantial returns against the inherent risks of a high-stakes IPO. With the grey market buzzing and analysts divided, the Allied Blenders and Distillers IPO is set to remain a hot topic in financial circles until the final bell rings.