Shares of online and offline learning solutions provider Veranda Learning Solutions have delivered multibagger returns to its investors in less than half a month of its listing.
This stock has surged over 100 percent from its issue price. It rallied to its all-time high of ₹298 per share on May 4, 2022, up 117 percent from its issue price of ₹137. However, since then the stock has lost 10 percent amid overall weak market sentiment, but it is trading around 85 percent above its issue price.
The stock listed at ₹157 on BSE, a 14.6 percent premium to its issue price of ₹137. The ₹200-crore IPO, which was subscribed 3.5 times, was open from March 29-31 and the price band for the issue was set at ₹130-137 per share. The portion set aside for non-institutional investors was subscribed 3.87 times and that of qualified institutional buyers 2.02 times.
The issue comprised only of fresh issuance of shares worth ₹200 crore and no offer for sale. The firm offers online and offline coaching services on UPSE, banking, government services and jobs examinations and was only the second IPO to open in March 2022.
In a latest development, Veranda Learning Solutions will hold an extraordinary general meeting on May 27 during which the board members will take discuss several important proposals. Among those is approving the 'Employees Stock Option Plan 2022' to be implemented for the employees of the company and the employees of the subsidiaries.
What is Employee Stock Option Plan?
An employee stock ownership plan (ESOP) grants employees company shares, often based on the duration of their employment. Typically, it is part of a compensation package, where shares will vest over a period of time.
The company reported a loss of ₹8.3 crore for FY21 and a revenue of ₹2.5 crore during the same period.
Most brokerages recommend avoiding the issue due to weak financials and fundamentals of the firm.
Hem recommends avoiding the issue by looking at the company's financials and valuation. However, it added that the company’s business model is technology-driven, asset-light and scalable with a proven track record of promoters.
Disclaimer: This story is for educational purposes only. Please speak to an investment advisor before making any investment decisions.