IPO anniversary: Electronics Mart India Limited gained 185% from its IPO issue price in a year; do you own it?

Electronics Mart India Limited, specialising in the sale of consumer electronics and durable products, celebrated the first anniversary of its IPO journey today.

The IPO opened on October 4, 2022, and closed on October 7, 2022. On the final day of the IPO window, it witnessed a subscription rate of 71.93 times. The public issue received an overwhelming response, with the retail category being subscribed 19.72 times, the QIB category achieving a subscription rate of 169.54 times, and the NII category reaching a subscription rate of 63.59 times.

The IPO price range was set between Rs 56 and Rs 59, with a face value of Rs 10 per share and a lot size of 254 shares. The total size of the company’s IPO was Rs 500 crore, and the final share issue price was fixed at Rs 59 each.

The stock debuted on October 17, 2020, with a premium in the market, experiencing an impressive increase of 51% to Rs 89.40 per share on the BSE. This means that investors generated a substantial return on the listing day itself. However, it concluded the day at Rs 84.45 per share.

As of the time of writing this article, it is trading at Rs 167.90 per share, which represents a 185% increase compared to its issue price. Even if someone had bought shares on the listing day at the closing price, they would have generated approximately a 100% return.

Investors who placed their trust in the company and held their investments through all the market fluctuations have been handsomely rewarded with impressive returns since its IPO.

Financial Performance 

In Q1 FY24, the company experienced a notable increase in its revenue from operations, rising from Rs 1408 crore to Rs 1689 crore, marking a 20% increase. The company reported an operating profit of Rs 130 crore, compared to Rs 97 crore in the corresponding quarter of the previous year. The operating profit margin stood at 8% during the June quarter.

Meanwhile, the company’s net profit for the quarter amounted to Rs 60 crore, showing a significant increase compared to the profit of Rs 41 crore in the corresponding quarter of the previous year. In the last quarter of FY23, the company reported a net profit of Rs 36 crore.

The company’s ROCE (Return on Capital Employed) and ROE (Return on Equity) are 12% and 13.8%, respectively. The company’s shares are currently trading at a P/E (Price-to-Earnings) ratio of 45.3 times in the market.

Business Overview: 

Electronics Mart India Limited is an Indian company specializing in the sale of consumer electronics and durable products. The company’s operations are divided between retail and wholesale distribution of electronic household items and accessories, which are available through both physical stores and online platforms. Their retail presence spans across the states of Telangana and Andhra Pradesh, and they also maintain a robust online presence.

Incorporated in the year 1980, It has earned the distinction of being the fourth-largest retailer of consumer durables and electronics within India. The company has a portfolio of 127 stores and five distinct brands covering a wide range of products, including electronics, kitchen appliances, audio equipment, and automation solutions.

Stock Chart (Weekly Time Frame) 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.