Sula Vineyards IPO: Retail investors show strong demand, portion fully subscribed; check latest GMP

As per NSE data, at around 12.42 pm on Wednesday, the IPO received cumulative bids of 1,65,20,490 equity shares — subscribing 88% of the total offered size of 1,88,30,372 equity shares. The portion reserved for retail investors fully subscribed by 1.28 times, while the non-institutional investors aka the HNI portion witnessed a subscription of 72% against the reserved size. However, the qualified institutional buyers (QIBs) portion subscribed by 30% against offered size.

Sula launched its ₹960.35 IPO on December 12 and the issue is set to close on December 14. The majority of experts have given a ‘subscribe’ recommendation on the IPO for listing gains. Sula is seen to be a first-of-its-kind listing in the wine market.

The company has already registered ₹288.10 crore from anchor investors on December 9.

Under the IPO, the company is offering equity shares aggregating to ₹960.35 crore. The IPO is entirely offer for sale at a price band of ₹340 per share and ₹357 per share. Of the total, 50% of the IPO size will be allotted to qualified institutional buyers (QIB) for bidding, while 15% will be reserved for non-institutional investors (NIIs) and the remaining 35% will be kept for retail individual investors.

Since the issue is an offer for sale, the company will not utilise the proceeds from the IPO. Selling shareholders in the IPO will receive the proceeds.

In the OFS, the selling shareholders are — promoter Rajeev Samant, and investors such as Cofintra S.A, Haystack Investments, Saama Capital III, SWIP Holdings, Verlinvest S.A, and Verlinvest France S.A. Others are — Dinesh G. Vazirani, J.A. Moos, Karishma Singh, Major A.V. Phatak, Narain Girdhar Chanrai, Ruta M. Samant, and Sanjay Naraindas Kirpalani.

Sula’s equity shares will list on BSE and NSE post the IPO. With a GMP of ₹17 in the grey market, the IPO has the potential of listing at around ₹374 on exchanges ( ₹17 plus ₹370 per share) as of now. However, the outlook for listing price may change ahead since the grey market is unregulated.

Currently, Sula Vineyards have been a consistent market leader in the Indian wine industry. Sula has made remarkable progress in over a decade. Currently, the company produces 56 different labels of wines across 13 district brands at its four-owned and two leased production facilities that are situated in Maharashtra and Karnataka.

In FY22, the company’s revenue from operations was ₹4,539.16 million with a net sales margin1 of 69.83% and profit after tax of ₹521.39 million in the same period. In the first half of FY23, the company’s revenue stood at ₹2,240.68 million with a net sales margin of 74.32% and profit after tax of ₹ ₹305.06 million.