It opened at Rs 157 on BSE against issue price of Rs 137, while it opened 8.7 percent down at Rs 125 on National Stock Exchange.
Veranda Learning Solutions
Veranda Learning Solutions made a strong debut on April 11 as the stock listed at a 14.60 percent premium to the issue price after decent subscription to its IPO.
It opened at Rs 157 on BSE against issue price of Rs 137, while it opened 8.7 percent down at Rs 125 on National Stock Exchange.
The Rs 200 crore public issue was subscribed 3.53 times during the March 29-31 period as retail investors bid for 10.76 times the shares reserved for them, while the portion set aside for non-institutional investors was subscribed 3.87 times and that of qualified institutional buyers 2.02 times.
The diversified and integrated learning solutions provider is going to utilise net issue proceeds for repaying debts, payment of acquisition consideration of Edureka, and growth initiatives.
Veranda provides long and short term preparatory courses for students for UPSC exams, State Public Service Commission, Staff Selection Commission, banking, insurance, railways and chartered accountancy.
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All the brokerage houses had an 'avoid' rating on the public issue citing the loss making status, negative operating cash flows and expensive valuations. The price band for the offer was Rs 130-137 per share.
"Although the business model is technology driven, asset light and scalable with a proven track record of promoters along with a result oriented method of teaching with a 360 degree approach and diversified course offerings and delivery channels but after looking at the financials and valuations, we recommend “avoid” on issue," said Hem Securities.
Marwadi Financial Service had also assigned an 'avoid' rating to this IPO as the company is loss making with negative operating cash flows and is available at expensive valuation on an absolute basis.
Veranda recorded a loss of Rs 8.3 crore on revenue of Rs 2.54 crore for the financial year 2020-21, while its loss in the six months ended September 2021 was Rs 18.3 crore on revenue of Rs 15.46 crore.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Veranda Learning Solutions debuts at 14.6% premium to IPO price - Moneycontrol
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