Sula Vineyards, the country’s leading winemaker, opened its initial public offering (IPO) to bids December 12-14. The company’s public offering, offered for sale in its entirety (OFS), received a muted reception from investors on Wednesday, the final day of bidding. The gray market has followed this sentiment, with Sula Vineyards stock not receiving a gray market premium (GMP). Experts believe that the entire offering, which is OFS, could affect subscription numbers and the GMP of the shares.
Sula Vineyards is considered the market leader in red, white and sparkling wine variants. The company sells wines under a number of well-known brands in addition to the flagship Sula. These include names like RASA, Dindori, The Source, Satori, Madera and Dia.
Sula Vineyards Ltd shares were trading at a discount in the gray market on Thursday, a day after the closing of the IPO offering, IPO Watch revealed. This implies that the gray market expects the IPO price of Sula Vineyards to be in the region of Rs 357, the top of the price range. The general sentiment in the gray market therefore points to the public problem of having a listing at face value or at a discount. Since GMP is an unregulated and speculative number with no connection whatsoever to the company’s financial data, experts advise that investors should avoid taking it seriously. Any investment decision in the market should be based on understanding the company’s fundamentals to minimize the risk involved.
The public is expected to hit the market next week with the credit of Shared starting December 21st. Thereafter, bids were made for at least 42 shares and multiples.
Sula Vineyard saw a sharp jump in profits, rising to Rs.52.14 crore in FY22 compared to Rs.3.01 crore in previous fiscal years. The company’s turnover increased from Rs. 225.76 crore to Rs. 421.53 crore during the period
Sula Vineyards’ public offering, described as a “first of its kind” in the wine market, had attracted 2.33 subscriptions by the close of the tender. Drawing data indicates that the retail portion was drawn 1.65 times. Monday, December 19 is expected to be the allotment date of Sula Vineyards’ initial public offering. Those who bid for the offering can check the subscription status on the online portal of the IPO’s registry, KFin Technologies.
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