Stove Kraft, one of the largest kitchen appliance suppliers in India, will make its debut on the bourses on February 5, days after its initial public offering (IPO) was well received by investors.
Experts expect Stove Kraft's shares to begin trade on February 5 at around 15 percent premium over its issue price of Rs 385, citing strong market conditions but are worried about sustainability of the rally. The market has rallied over 9 percent in last four sessions after the growth-oriented Budget.
Stove Kraft shares traded at Rs 60-65 in the grey market, a 15-17 percent premium over the issue price, the data available on IPO Watch showed. The said premium increased significantly from Rs 35-40 seen in previous session.
The grey market is an unofficial trading platform where shares get traded well before the allotment in the IPO and listing on bourses.
"We believe the reason behind raise in grey premium is due to Budget-driven bullish market sentiment and overwhelming performance in last few IPO debuts pushing grey premium to Rs 60-65 from Rs 35-40," Prashanth Tapse, AVP Research at Mehta Equities told Moneycontrol.
"Looking at overall response, the subscription data i.e. QIB (8x times) and NII (32x times) have shown lesser interest in comparison to subscription in Indigo Paints or Home First. Hence we expect a decent around 15-20 percent listing premium of Rs 55-75 on the issue price which would be mainly on the back of bullish market sentiment," he said.
Astha Jain, Senior Research Analyst at Hem Securities, expects the stock to list at 10-15 percent premium to issue price. The listing may be around Rs 450, as the bullish sentiment, a favourable Budget and positive global cues have created a friendly ground, said Gaurav Garg, Head of Research at CapitalVia Global Research.
But Keshav Lahoti, Associate Equity Analyst at Angel Broking, expects a muted debut.
Stove Kraft, which manufactures and sells kitchen solutions under the brand names of Pigeo and 'Gilma, garnered Rs 413 crore through the public issue that was subscribed 18 times during January 25-28.
It comprised a fresh issue of Rs 95 crore and an offer for sale of Rs 318 crore by promoters and investors (Sequoia Capital). The company will utilise fresh issue proceeds for repayment of debts.
The company plans to manufacture value, premium, and semi-premium kitchen supplies under the 'Black + Decker' brand. Its product portfolio has more than 660 kitchen solutions including cookware, cooking appliances, household utilities, and others. It has manufacturing facilities at Bengaluru in Karnataka and Baddi in Himachal Pradesh.
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