Stanley IPO booked 1.44x on the first day of bidding, NIIs steal the show (2024)

Stanley IPO has reserved 50% of the shares for qualified institutional buyers (QIB), 15% for non-institutional institutional investors (NII), and 35% for retail investors.

Also Read: Stanley Lifestyles IPO: Furniture maker garners ₹161.10 crore from anchor investors ahead of public issue

According to the RedSeer Report, Stanley Lifestyles is an Indian super-premium and luxury furniture brand, as well as one of the few home-grown super-premium and luxury consumer companies that operate on a large scale in terms of both production and retail. Furthermore, in terms of sales, they are the fourth largest player in India's home furnishings sector for fiscal year 2023.

The firm has no listed counterparts in India or abroad, making it hard to compare and analyse its financial performance to other companies in the same industry.

Stanley IPO Subscription Status

Stanley Lifestyles IPO has got subscribed 1.44 times on the first day of subscription today, as per BSE data.

The initial share sale received bids for 1,46,97,400 shares against 1,02,41,507 shares on offer, as per BSE data.

The portion for non-institutional investors got subscribed 2.01 times while the category for Retail Individual Investors received 1.81 times subscription. The Qualified Institutional Buyers (QIBs) booked 30%.

Stanley Lifestyles IPO Review

Anand Rathi Research

According to the brokerage's forecast, they are the fourth largest revenue player in India's home furnishings category in fiscal 2023. On the valuation perspective, the firm is richly priced at a P/E of 60x post-equity share issuance on an FY23 earnings basis, and it has no publicly traded peers.

"We believe that company has a scope of business improvement on the back of industry tailwinds, brand recall and business scalability. Thus, we recommend an “SUBSCRIBE – long term" rating to the IPO," the brokerage said.

Indsec Securities

According to the brokerage, at an upper price band of ₹369/sh, the IPO is worth 79.8x on an annualised basis in FY24. The firm does not have an identical peer to compare against. Stanley Lifestyles manufactures and retails premium and luxury home furnishings. Over FY21-23, its revenue increased at a CAGR of 46.3%, owing to increased retail sales and store growth. EBITDA and PAT have increased at a CAGR of 67%/465% (lower base) during the same time period. For the next 2-3 years. Management anticipates sales to increase by 20-25%, but the focus is on profit growth.

“On an annualised FY24 basis, ROE and ROCE stands at 11% and 16.8% respectively. Net proceeds would be utilised for store expansion and renovation, and capital expenditure (machinery). We believe, growth would be driven by (1) Tailwinds from strong real estate demand, (2) New store addition, (3) increase in local procurement of leather and wood to rationalise production cost. We assign a “Subscribe" rating to the stock," the brokerage said.

Also Read: Stanley Lifestyles IPO sets price band at ₹351-369 apiece; check issue, key dates, more

Stanley IPO details

Stanley Lifestyles IPO, comprises a fresh issue of ₹200 crore, and an offer-for-sale (OFS) of 9,133,454 equity shares by the promoters and shareholders.

In the OFS, promoter selling shareholder, Sunil Suresh and Shubha Sunil will offload up to 1,182,000 equity shares each. The other selling shareholders are Oman India Joint Investment Fund II (5,544,454 equity shares), Kiran Bhanu Vuppalapat (1,000,000 equity shares), and Sridevi Venkata Vuppalapati (225,000 equity shares).

The proceeds from the new issue will be used to open more stores and buy new machinery and equipment. Between 2025 and 2027, the company plans to open 24 new stores in Delhi, Tamil Nadu, Telangana, and Maharashtra via its subsidiaries ABS Seating Pvt Ltd, Sana Lifestyles Ltd, Stanley Retail Ltd, Shrasta Décor Pvt Ltd, and Staras Seating Pvt Ltd.

The Stanley IPO's book-running lead managers are Axis Capital Limited, ICICI Securities Limited, Jm Financial Limited, and SBI Capital Markets Limited, with Kfin Technologies Limited serving as the registrar.

Also Read: Bengaluru-based Stanley Lifestyles gets SEBI nod for IPO

Stanley Lifestyles IPO GMP today

Stanley IPO GMP today is +162. This indicates Stanley Lifestyles share price were trading at a premium of ₹162 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, Stanley Lifestyles IPO expected listing price was indicated at ₹531 apiece, which is 43.9% higher than the IPO price of ₹369.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Also Read: DEE Development Engineers to Stanley Lifestyles: ₹1087 crore at stake; GMP, other details of three upcoming IPOs

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 21 Jun 2024, 09:12 AM IST