The much-anticipated IPO of Awfis Space Solutions Limited is making waves in the market. Opened on May 22, 2024, the IPO has already seen an overwhelming response from investors, reflecting a strong potential for the company in the eyes of market participants.
At the end of the second day of bidding, the public issue had been oversubscribed 11.41 times. This robust demand indicates a significant level of confidence from investors across the board. On the third day, the enthusiasm continued, with the subscription status reaching an impressive 26.25 times by 12:03 PM.
Retail investors have shown particularly high interest, with their portion being subscribed 33.29 times.NII has also heavily backed the IPO, subscribing to their segment 61.33 times, while QIB has subscribed 6.50 times.
Adding to the positive momentum, the grey market premium for the Awfis Space Solutions IPO has risen. As of today, the GMP stands at ₹120, a ₹9 increase from the weekend’s ₹111. The GMP is a critical indicator in the grey market, often seen as a precursor to the stock’s potential listing price.
This rise is a clear signal of the market’s optimism, spurred by recent positive trends in the secondary market. Despite global market weaknesses, the Indian stock market’s recent peak has fueled renewed interest and confidence among investors.
Market observers attribute the uptick in GMP to a reversal in the broader market sentiment. This positive trend has likely amplified the demand for the Awfis IPO, as investors look for opportunities that promise good returns in a bullish market scenario. The company’s strategic move towards an asset-light model has also been a point of interest, promising potential benefits in the coming periods.
Expert reviews have been largely favorable, adding to the IPO’s appeal. Anand Rathi (a well-respected brokerage) has recommended a ‘Subscribe – Long Term‘ rating for the IPO. Their analysis highlights Awfis’ Price-to-sales ratio of 4.9x based on FY23 earnings.
They emphasize the company’s large Total Addressable Market, driven by trends such as enterprise focus on flexibility, cost optimization, workforce fluidity, and the growth of start-ups in Tier 1 and Tier 2 cities. This strategic positioning, combined with the company’s focus on wellness, facilities, and amenities, makes it a compelling investment.
Warwadi Shares and Finance have also issued a buy recommendation, noting the company’s strong leadership position in a growing market. They highlight the company’s diverse space sourcing and demand strategies, which position it uniquely in the industry.
With a market cap of ₹26,587 million and an FY24 annualized EBITDA of ₹2,377 million, Awfis is set to list at an EV/EBITDA of 11.25x. This valuation, they argue, is reasonable given the company’s market leadership and growth potential.
Ventura Securities and SMIFS have echoed these sentiments, both recommending a buy for the IPO. Their endorsements are based on the company’s strong market position and promising future outlook.
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