Veranda Learning share listing: The issue looked expensively priced as the asking rate was almost 25x price to sales for a loss making company, say experts. Know what the GMP signals ahead of listing
Veranda IPO: Veranda Learning Solutions shares made a strong debut on bourses on Monday, April 11 as the stock listed at a 14.60 percent premium to the issue price after decent subscription to its IPO. It opened at Rs 157 on BSE against issue price of Rs 137, while it opened 8.7 per cent down at Rs 125 on National Stock Exchange.
Veranda IPO: Subscription Status
The online and offline learning solutions provider launched Veranda IPO during March 29-31, which was subscribed 3.53 times with support from all kind of investors. Retail investors were at the forefront in terms of support, putting in bids 10.76 times the allotted quota, while non-institutional investors subscribed shares 3.87 times reserved portion and qualified institutional investors bought shares 2.02 times the portion set aside for them.
Veranda IPO: GMP Ahead Of Listing
Veranda is quoting at a 10 per cent premium in the grey market at Rs 152 per share as against IPO price of Rs 137 per share, as per the data available on IPO Watch and IPO Wala. As Veranda IPO GMP is Rs 15, it means grey market is expecting this public issue to list at around Rs 152 ( Rs 137 + Rs 15), which is around 10 per cent higher from the price band of Rs 130 to Rs 137. However, secondary market experts said that GMP is not an ideal indicator about the expected listing gain as it has nothing to do with the balance sheet of the company.
What Experts Say About Veranda Learning IPO Listing?
According to stock market analysts, Veranda Learning share price may have a ‘flat’ opening today. They said that the company is a loss-making venture and it was offered at higher valuations as well. So, chances are very bleak for fresh investors buying stake in the company from the open market post-listing. Market experts said that the stock may list in Rs 150 to Rs 160 range, delivering 10 per cent to 15 per cent premium to the allottees against the issue price of Rs 137 per equity share. However, much will depend on the mood of the market, analysts added.
The company successfully raised Rs 200 crore through the offer which will be utilised for repaying debts, payment of acquisition consideration of Edureka, and growth initiatives.
“Considering decent subscription demand to its initial public offering and niche player in online/offline learning solutions, we expect 5-10 per cent listing show on a best case scenario,” said Prashanth Tapse, Vice President (Research) at Mehta Equities.
All brokerage houses had assigned avoid rating to this IPO as the company is loss making company with negative operating cash flows.
Veranda, in the financial year ended March 2021, posted a loss of Rs 8.3 crore on revenue of Rs 2.54 crore, while the loss in six months period ended September 2021, was at Rs 18.3 crore on revenue of Rs 15.46 crore.
Incorporated in 2018, Veranda Learning Solutions offers online and offline coaching services for career-defining courses such as UPSE, Chartered Accountant, Banking, and government exams to students, graduates, professionals, and corporate employees. They have been able to register a lot of students and has been able to grow their revenue to a great extent although the company increased losses in the process. There are no listed companies in India that engage in a business similar to that of Veranda.
