GNG Electronics IPO: A New Era in Refurbished Electronics
GNG Electronics, a prominent player in the refurbishment of laptops and desktops, has officially launched its Initial Public Offering (IPO) today, July 23, and will conclude on July 25. With a price band set between ₹225 and ₹237 per share, the company is poised to make a significant impact in the market, especially with a market capitalization exceeding ₹2,700 crore at the upper limit of the price range.
Anchor Investor Support
Before opening its IPO to the public, GNG Electronics successfully secured ₹138 crore from a range of anchor investors. Notable names in this round include Goldman Sachs Fund, Motilal Oswal Mutual Fund, Buoyant Opportunities Strategy, Edelweiss Mutual Fund, and Mirae Asset Mutual Fund. This robust backing underscores the confidence that institutional investors have in GNG Electronics’ business model and growth potential.
According to a circular posted on the BSE’s website, GNG Electronics allocated 58,28,290 equity shares to 14 different funds at ₹237 each, culminating in a total transaction amount of ₹138.13 crore.
Company Overview
GNG Electronics operates under the "Electronics Bazaar" brand and is recognized as one of the leading refurbishers of laptops and desktops. The company boasts a strong presence not only in India but also in international markets, including the US, Europe, Africa, and the UAE. GNG Electronics covers the entire refurbishment value chain—from sourcing and refurbishment to sales and after-sale services, including warranty provisions.
IPO Subscription Status
As of the first day of the IPO, GNG Electronics has reported a subscription status of 8.99 times. The retail portion was subscribed 8.89 times, while the Non-Institutional Investors (NII) segment saw an impressive 18.85 times subscription. Qualified Institutional Buyers (QIBs) also showed interest, with their portion receiving 1.68 times bids. By 5:00 PM IST, the company had received bids for 12,75,36,948 shares against the 1,41,88,644 shares available.
Market Analysis and Recommendations
According to Canara Bank Securities, GNG Electronics is well-positioned to capitalize on favorable industry trends, particularly as the demand for refurbished electronics shifts from unorganized to organized players. The IPO is priced at a P/E ratio of 33.43x and a P/BV of 10.17x based on FY25 earnings, which appears reasonable given the company’s growth potential and leadership in the sector. The brokerage has recommended a "SUBSCRIBE" rating for investors with a medium to long-term outlook.
SBI Securities also highlighted promising growth predictions for both the Global Refurbished PC Market and the Indian Refurbished PC Market, projecting a compound annual growth rate (CAGR) of 18.9% and 31.3%, respectively, from CY24 to CY29E and FY25 to FY30E. Additionally, GNG Electronics plans to repay ₹320 crore in debt during FY26, which will help reduce interest expenses and enhance profitability.
IPO Details
The GNG Electronics IPO comprises a fresh equity share issue totaling ₹400 crore and an offer for sale (OFS) of 25.5 lakh equity shares from promoters, valued at ₹60.43 crore at the highest price point. This brings the overall issue size to ₹460.43 crore. The funds raised will be allocated for debt repayment, working capital needs, and general corporate purposes.
The book-running lead managers for the IPO are Motilal Oswal Investment Advisors, IIFL Capital Services, and JM Financial, while Bigshare Services Pvt Ltd serves as the registrar for this issue.
Grey Market Premium
As of today, the grey market premium (GMP) for GNG Electronics stands at +₹103, indicating that shares are trading at a premium in the grey market. This suggests a promising listing, with the estimated listing price projected at ₹340 per share, representing a 43.46% increase over the IPO price of ₹237. The grey market activities have shown an upward trend, with the minimum GMP recorded at ₹71 and the maximum at ₹103.
Conclusion
GNG Electronics’ IPO marks a significant milestone for the company and the refurbished electronics market. With strong institutional backing, promising growth prospects, and a well-structured business model, GNG Electronics is set to attract considerable attention from investors. As always, potential investors are advised to conduct thorough research and consult certified experts before making any investment decisions.