IPO for Sula Vineyards begins today: Investors should they subscribe?

Sula Vineyards is India's largest wine producer and retailer . The Indian government's largest wine producer and retailer expects to raise Rs 960.35 crore from a public auction .

Today, Sula Vineyards' initial public offering (IPO) is scheduled to open on the stock exchanges.The public issue will be up for bid until the 14th December 2022.The Indian government's largest wine producer and retailer expects to raise Rs 960.35 crore from a public auction, which is purely an OFS (offer for sale).The firm has set up a fixed price band for the public issue, which is priced between Rs 340 and Rs 357 per unit.

The IPO can be sold in lots, one lot will consist of 42 shares of the corporation, according to the bidder.A bidder may bid for at least one lot, but a retail investor may bid for up to 13 lots of the IPO at a time.The tentative date for the part allocation is set to be the 19th of December 2022.On December 22, 2022, the public issue is scheduled for listing on BSE and NSE.

The company reported a 6.7 percent decrease in its consolidated income, which stood at Rs.1.7 billion in the period 20-22.In FY22, the economy has topped 45 The IPO has a subscriber rating from Swastika Investmart.In this sector, Sula vineyards Limited enjoys the benefits of significant entry barriers.

Its financial position is also improving.Sula Vineyard's latest issue has a PE value of 54.67, which is lower than its earlier offerings.However, this IPO is only recommended for high-risk investors because of its complete offer for sale and low promoter holding.Sula has increased market share from 100% grapes wine category to 52% in Fiscal 2020, according to total revenue from operations.

In FY22, Sulas Shiraz Cabernet was India's highest selling wine by number, with gross billings totaling Rs 91.83 crore.The book running lead managers are Kotak Mahindra Capital Company Limited, CLSA India Private Limited, and IIFL Securities Limited.Investors are being encouraged by the IPO's high growth potential and valuation.Given the lower level of wine penetration in the domestic market and changing socioeconomic status such as a higher per capita income and a growing target group, the domestic wine market is on the verge of exponential expansion, according to Choice Broking.

On Friday, 8,070,158 equity shares were sold for Rs 357 per share.Nearly 22 million dollars in cash was invested in the project.Abu Dhabi Investment Authority, Goldman Sachs, New York State Teachers Retirement System, Ashoka India Equity Investment Trust Plc, Segantii India Mauritius, Morgan Stanley, BNP Paribas Arbitrage, and Citigroup Global Markets Mauritius are among them.Aditya Birla Sun Life Trustee, HDFC Mutual Fund, SBI Mutual Fund, ICICI Prudential Life Insurance, and HDFC Life Insurance were among the domestic investors who bought shares.

The post-issue PE represents 52.5x FY22 earnings (at the upper edge of the issue price band), less than indirect competitors like United Spirits, United Breweries Ltd, and Radico Khaitan Ltd, according to valuations.SVL has a subset of applications that no competitors have.At this stage, however, its financials are questionable, given the 10% growth in net sales along with the fact that it recently turned profitable.We think this valuation is reasonable considering all of the above factors.

Sula vineyards limited is a well-known market leader in the Indian wine industry, the country's largest wine producer, with the broadest and most innovative product portfolio, as well as a well-known wine distribution network, a sales presence, and a secure supply of raw materials with long-term contracts exclusive to Sula.Sula vineyards limited is available at PE 35.8x with a market cap of Rs 30,058 million at the time of the issue of equity shares, with a return on net worth of 11.45%.Sula vineyards limited IPO is priced right and we would add a Subscribe- Long Term rating to the IPO, said brokerage Anand Rathi.Sula is located in the city of Sula, and broker Motilal Oswal believes that the city is in a prime position for the industry's expansion.

The IPO is expected to have a PE of 49x1HFY23 annualized earnings.The IPO may be clever because it would be the first of its kind listing in the wine industry.Investors should Sign up for listing gains, it stated in a note.Sula Vineyards has posted a healthy EBITDA increase.

Given its active product development activities and plans for aggressive distributor network expansion, the organization is well poised to increase its market share in the coming years.Investors are encouraged to register for a listing gain, according to brokerage Arihant Capital.

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