The IPO of Prataap snacks is over, and the IPO has been over-subscribed nearly 47 times on Tuesday. The offer that commenced on September 22, has remained more or less over-subscribed in the past two days too.

It is an achievement considering that the issue was over-subscribed 3.77 times around 1:05 PM (data from NSE).

For beginners, the makers of Diamond Chips, issued fresh equity shares worth Rs 200 crore, and an offer for sale of 3005770 shares. The price-band for the shares was calculated in the range of Rs 930-938 per share.

At that price, the scrip was valued 223 times of its price-earnings ratio, way ahead of its close peer DFM foods, which was valued at nearly 93 times of its p/e ratio. DFM Foods trading at Rs 1332, with a 32 point or 2.46% intra-day gain on the BSE at 1:30 hours.

A handful of traders took to twitter to express their concerns:

A bubble looks probable:

Another user hints that valuations could impact sales growth:

Most brokerages such as Nirmal Bang, HDFC Securities, and Prabhudas Lilladher too signaled that the calculations could pose a risk.

Whether the stock opens in the green or not, the million dollar question that comes to the fore is, who benefits from the steep-valuation or as a twitter user posed, is it representative of a bubble in our markets

A Livemint story suggests that this could be a bubble. Read the story here:

The Mint report explains that Sequoia Capital, which has an exposure of Rs 265 crore in the company is selling 13.6% shares in the company. But at Rs 930-938 per share, Sequoia will be recovering close to 60% of its investments. In fact, it purchased the shares at a price of Rs 200 each around 2014 and is reaping a profit of Rs 738 per share.

While valuations seem to charm promoters, the list price, much to the dismay of retail investors hasn't looked as inspiring as their subscribed rates.

Current trading price of big-profile IPOs in September has failed to stay ahead of the listing price, with the notable exception of Apex Frozen Foods.



Although, Dixon returned an over 60% value on the first day of its listing, it is still nearly 90 points below the listing price captured on Tuesday. Having said that, Dixon still trades at a premium, which even the likes of scrips such as Whirpool were unable to.

Dixon listed at a price of 2725 a share, while it was selling in the offer at a price of 1766.

The listing results should be out in a few more hours and there is hope among investors that Prataap will deliver a tangy listing.

But will it maintain its momentum and who will it deliver these returns for, are the two probable questions that investors will have in their minds.