Sula Vineyard shares debut flat, in line with analyst estimates; price falls 2

Sula Vineyard shares debut flat, in line with analyst estimates; price falls 2.65% post muted listing

Winemaker and seller Sula Vineyard shares listed at a muted listing over IPO price on NSE and BSE amid a positive domestic market. Sula Vineyard stock made its market debut at Rs 358 on the BSE, as compared to the public issue price of Rs 357. The scrip shortly thereafter fell to Rs 348.5 per share, down 2.65% or Rs 9 from its open. A tepid listing was expected as ahead of the market debut, Sula Vineyard shares were trading at a discount of Rs 15 in the grey market.

Sula Vineyard’s public issue was subscribed 2.33x. The QIB section was subscribed 4.12x, while the retail investors portion was subscribed 1.65x. The winemaker’s company’s IPO offloaded 2.69 crore shares for this issue. Prior to its listing, most analysts recommended investors to subscribe to the IPO. The IPO is entirely an offer for sale (OFS) aggregating to 26,900,532 equity shares by the promoter, investors and other shareholders. The winemaker raised over Rs 288.10 crore from 22 anchor investors ahead of the issue.

“The company is a pioneer in the wine tourism business as well. It enjoys the benefit of high entry barriers and has the largest wine distribution network and sales presence. Its financial performance is also improving. This issue of Sula Vineyards had a P/E valuation of 54.67, which seems fully priced; the issue, however, was a complete offer for sale, and low promoter holdings is also a concern. The issue is not getting any positive response in the grey market. Looking at the current market conditions, it will not be fair to hope much from its listing.” said Santosh Meena, Head of Research, Swastika Investmart on Wednesday, prior to Sula Vineyard’s listing.

Sula Vineyards is India’s largest wine producer and seller as of 31 March 2022. The company distributes wines under a bouquet of brands such as Sula (its flagship brand), RASA, Dindori, The Source, Satori, Madera & Dia. Currently, it produces 56 different labels of wines across 13 distinct brands at its four owned and two leased production facilities located in Maharashtra and Karnataka.