Wakefit, Corona Remedies’ GMPs jump up to 18% ahead of IPOs
The Indian initial public offering (IPO) market is abuzz with activity, and two upcoming IPOs are generating significant interest among investors. Unlisted shares of Wakefit and Corona Remedies were trading at a premium of up to 18% in the grey market on Wednesday, ahead of their IPOs next week. This surge in demand is a positive indicator for the companies, which are looking to raise funds through their respective public issues.
Home and furnishings startup Wakefit has set a price band of ₹185-195 per share for its ₹1,289 crore IPO. The company’s issue is expected to open on December 7 and close on December 11. The IPO comprises a fresh issue of ₹315 crore and an offer-for-sale (OFS) of ₹974 crore by existing shareholders. Wakefit intends to utilize the net proceeds from the fresh issue to repay debts, fund working capital requirements, and support strategic initiatives.
On the other hand, pharma firm Corona Remedies’ IPO is worth ₹655.37 crore. The company’s issue is also scheduled to open on December 7 and close on December 11. The IPO comprises a fresh issue of ₹280 crore and an OFS of ₹375.37 crore by existing shareholders. Corona Remedies plans to use the net proceeds from the fresh issue to expand its manufacturing facilities, invest in research and development, and strengthen its marketing and distribution network.
The grey market premium (GMP) is an unofficial indicator of the demand for a company’s shares before they are listed on the stock exchanges. A higher GMP suggests strong investor interest and a potential for a successful listing. In this case, the GMP for Wakefit and Corona Remedies has jumped up to 18%, indicating a robust demand for their shares.
The surge in GMP can be attributed to various factors, including the companies’ financial performance, growth prospects, and industry trends. Wakefit has demonstrated impressive growth in recent years, with its revenue increasing from ₹145.6 crore in FY20 to ₹392.4 crore in FY23. The company’s net profit has also grown significantly, from ₹10.4 crore in FY20 to ₹43.8 crore in FY23.
Similarly, Corona Remedies has a strong track record of financial performance, with its revenue increasing from ₹244.2 crore in FY20 to ₹444.1 crore in FY23. The company’s net profit has also grown substantially, from ₹24.4 crore in FY20 to ₹63.2 crore in FY23.
The home furnishings and pharmaceutical industries are also expected to witness significant growth in the coming years, driven by increasing demand and government initiatives. The Indian home furnishings market is projected to grow at a CAGR of 10-12% from 2023 to 2028, while the pharmaceutical industry is expected to grow at a CAGR of 12-15% during the same period.
In conclusion, the surge in GMP for Wakefit and Corona Remedies is a positive indicator for the companies, which are looking to raise funds through their respective IPOs. The strong demand for their shares suggests a potential for a successful listing and a positive start to their journey as publicly traded companies. Investors should, however, exercise caution and conduct thorough research before investing in the IPOs.
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