Sula Vineyards IPO: Here’s What GMP Trends Indicate after Closure of Subscription

Sula Vineyards, the country’s leading winemaker, opened its initial public offer (IPO) for bidding from December 12 through 14. The company’s public issue, which is entirely offered for sale (OFS), witnessed muted reaction from investors on Wednesday, the last day of bidding. The grey market has followed this sentiment, with the Sula Vineyards’ stocks getting no grey market premium (GMP). Experts believe that the whole offering being OFS could be impacting the subscription numbers and the GMP of the shares.

Sula Vineyards is understood to be the market leader across the red, white, and sparkling wine variants. The company distributes wines under a number of popular brands apart from the flagship Sula. These include names such as RASA, Dindori, The Source, Satori, Madera and Dia.

The shares of Sula Vineyards Ltd were available at a discount in the grey market on Thursday, a day after the IPO bidding closed, revealed IPO Watch. This implies that the grey market expects the Sula Vineyards IPO listing price to be in the ballpark of Rs 357, the upper limit of the price band. The general sentiment in the grey market, thus, points towards the public issue of having a par or discounted listing. Since GMP is a non-regulated and speculative figure devoid of any connection to the company’s financials, experts suggest that investors avoid taking it seriously. Any investment decision in the market should be based on understanding the fundamentals of the company to minimize the risk involved.

The public is expected to make a debut in the market next week with the credit of shared beginning on December 21. Bids were invited for a minimum of 42 shares and multiples thereafter.

Sula Vineyard witnessed a sharp jump in its profit that rose to Rs 52.14 crore in FY 22 compared to Rs 3.01 crore in the previous financial years. The company’s revenue also grew to Rs 421.53 crore from Rs 225.76 during this period

Termed to be a “first of its kind” listing in the wine market, Sula Vineyards’ public issue had been subscribed 2.33 times by the time the bidding closed. Subscription data suggests that its retail portion got subscribed 1.65 times. Monday, December 19, is likely to be the date of the allotment of the Sula Vineyards IPO. Those who have bid for the issue can check the subscription status on the online portal of the registrar of the IPO, KFin Technologies.

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