Electronics Mart India IPO shares bumper listing on BSE, NSE, stock debuts with 52% premium against IPO price Electronics Mart India Ltd shares witnessed bumped listing on the both BSE and NSE as the stock listed at Rs 90, up 52.5 per cent from the IPO price of Rs 59 per share, largely in-line with what analysts expected. Company’s market capitalisation on BSE stood at Rs 3,439 crore at the time of listing. Company’s strong listing can be attributed to strong interest from investors, reasonable valuations, and a sanguine growth outlook, according to Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd. Electronics Mart India is the 4th largest consumer durable and electronics retailer in India with a leadership position in South India having the majority of its stores located in Telangana and Andhra Pradesh. Also Read: Rupee may appreciate to 82.20 per dollar amid weakness in crude oil prices; USDINR to trade in this range Stay invested with long-term target of Rs 120 “Against an issue price of Rs 59, the stock’s opening price on the NSE was Rs 90. The offer’s price range was Rs. 56–59 per share. Despite the pandemic, its operating revenue grew at a compound annual growth rate of 17.09 percent, from Rs 3,172.47 crore in FY20 to Rs 4,349.32 crore in FY22. Return on equity and return on capital employed are 16% and 18%, respectively, for the past three years. We suggest investors to maintain their investment in the stock with a long-term target price of Rs 120 due to its good financials and profitability,” said Rahul Goud, Research Analyst – Equity Research, CapitalVia Research. The IPO of the Hyderabad-based consumer durables retail chain was subscribed 72 times as on the final day of the offer. The portion reserved for qualified institutional buyers was subscribed 169.54 times and the same for non-institutional investors was subscribed 63.59 times. The portion for retail investors was subscribed 19.71 times. The IPO consisted of a fresh issue of shares aggregating to Rs 500 crore, with no offer for sale (OFS) component. The company intends to utilise the net proceeds to fund capex and incremental working capital requirements to the extent of Rs 133.8 crore and Rs 200 crore, respectively, and for repayment, prepayment of Rs 50 crore of debt besides general corporate purposes. Also Read: Nifty set to hit 18000 in coming weeks amid Q2 earnings, festive season; Bank Nifty support at 38000; Buy TCS As on 31 August 2022, the company had 112 stores across 36 cities, urban agglomerates, supported by a workforce of 2,091 professionals with 1.12 million square feet of retail space. Electronics Mart India was founded by Pavan Kumar Bajaj and Karan Bajaj as a proprietary concern with a consumer durable and electronics store under the name of ‘M/s Bajaj Electronics’. Its multi-brand outlets operate under the brand names of Bajaj Electronics other than two specialized stores under the name of Kitchen Stories catering to kitchen-specific requirements. It is also in the process of setting up another such niche outlet under the name of Audio & Beyond catering to high-end audio and home automation solutions. (The stock recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)
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In its consultation paper, Sebi has suggested that trustees of mutual funds should focus on market abuse by AMC, its employees and mis-selling by the AMC to increase the asset base.
Also, trustees should be responsible for fairness of fees and expenses charged by the AMC, compare its performance with peers and ensure that AMC’s sponsor is not getting any undue advantage.
In addition to the core areas, the trustees should be responsible for periodically reviewing the steps taken by AMCs for the folios which do not contain all KYC attributes with bank details.
Further, Sebi has suggested that trustees and their resource persons should independently evaluate the extent of compliance by AMC and not merely rely on AMC’s assurances.
To facilitate trustees’ supervision, AMCs should provide them with analytical information.
Presently, the trustees primarily rely on the AMCs for ensuring compliance with the applicable rules.
Under the rules, trustees hold the property of the mutual fund in trust for the benefit of the unitholders. The trustees appoint an AMC to float schemes for the mutual fund and manage the funds mobilised under various schemes, in accordance with the investment objectives.
“In view of the increasing scale and reach of the mutual fund industry, trustees’ role in respect of unitholders’ protection assumes even greater significance,” Sebi said on Friday.
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Over the past decade there has been a five-fold increase in the size of the mutual fund industry. The assets under management (AUM) has surged from Rs 7.93 lakh crore in November 2012 to Rs 39.89 lakh crore in December 2022.
To ensure that trustees devote time and attention to their core responsibilities, Sebi has suggested that for fulfilling other responsibilities, trustees may rely on professional firms such as audit firms, legal firms, merchant bankers for carrying out due diligence on their behalf.
The Sebi also listed some duties trustees can delegate to AMCs. This include ensuring that all systems are in place prior to the launch of any scheme by the AMC, and calculating any income in the mutual fund due to the fund and any income received in the mutual fund for unitholders.
The regulator has proposed to provide a one year time to existing trustees with board of trustee structure to convert into a trustee company, from governance point of view.
Presently, two structures for trustees are permitted — corporate and board of trustees structure. Moreover, there are a few mutual funds which have the board of trustees structure while the trustees of all other mutual funds have adopted the structure of a trustee company.
Considering the enhanced role of trustees over the period of time, Sebi has suggested to increase the minimum number of trustees to adequately perform their functions. Presently, the minimum number of trustees prescribed is four.
Also, it has been proposed that the chairperson of the trustee company should be an independent director.
Sebi has suggested that apart from the meeting of the audit committee of AMCs and trustees (which mostly comprises of independent directors), the board of AMCs and the board of trustees may be mandated to meet at least once a year to discuss the issues concerning the mutual funds.
The regulator proposed that the existing MF Regulations on AMC and its obligations may be amended to include additional clauses with respect to the obligations of the board of AMC.
The proposed amendment may include a clause which casts an obligation on the board of AMC to ensure that all the activities of the asset management company are in accordance with the provisions of these regulations.
The Securities and Exchange Board of India (Sebi) has sought comments from public till February 24 on these proposals.