Electronics Mart India IPO: Should you subscribe or avoid? Know Anil Singhvi's recommendation

Electronics Mart India IPO: Today is the second day of consumer durables retail chain Electronics Mart India's Initial Public Offering (IPO). The IPO was subscribed 1.69 times on the first day of the offer i.e on October 4. The IPO consists of a fresh issue of equity shares aggregating to Rs 500 crore, with no offer for sale component. The price range for the IPO is Rs 56-59 per share.

According to Zee Business Managing Editor Anil Singhvi, one can apply for big listing gains. However, Singhvi said that he would not advise people to invest for the long term. He is of the view that investors should apply for this IPO with the sole intention of making some listing gains.

"The track record of the growth of Electronics Mart India is fabulous. The company has around 112 stores and deals in mobiles, electronic devices and consumer durables. Most of its presence is in Telangana and Hyderabad. It is one of the top 4 companies of consumer durables and electronic retailers. The revenue of the company has increased by 18% on yearly basis from 2016 to 2021. This is a profit-making company and planning for expansion worth Rs 111 crore. They have plans to open 58 more stores," he said.

Singhvi also said that the company has an attractive valuation. However, he emphasised that it is better to stick to listing gains. Explaining the reasons behind it, Singhvi said that the business is very competitive. "The reason why one should not keep this stock in the portfolio for the long-term is because of tough competition from the e-commerce space. The company still has just 1% revenue from e-commerce. So they are purely focusing on stores as of now," the Managing Editor said.

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Also, it is important to note that there are 89 stores, out of 112 stores, that are involved in a legal tussle with Bajaj over the use of the name. If the judgement comes against Electronics Mart India, it can hurt the business of the company.

Electronics Mart India IPO listing date

Electronics Mart India IPO allotment status will be declared on October 12 while the listing will take place on October 17 on the NSE and BSE.