The initial public offering (IPO) of Veranda Learning Solutions was subscribed 3.5 times on March 31, 2021, the final day of bidding. The issue received bids for over 4 crore shares against the offer size of 1.17 crore equity shares.
Retail investors bid the most. The retail portion was bid 10.58 times their allotted quota. Meanwhile, the quota set aside for non-institutional investors was subscribed 3.87 times and that of qualified institutional buyers 2.02 times.
The ₹200 crore IPO will be utilise the funds raised for the repayment of debts, payment of acquisition cost of Edureka, and growth initiatives.
The price band for the offer was set at ₹130-137 per share. The issue comprises 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.
Veranda Learning Solutions Limited was incorporated on November 20, 2018. Veranda is engaged in the business of offering diversified and integrated learning solutions in online, offline hybrid and offline blended formats.
In the financial year ended March 2021, Veranda posted a loss of ₹8.3 crore on a revenue of ₹2.54 crore, and in the six months period ended September 2021, the loss was at ₹18.3 crore on increased revenue of ₹15.46 crore.
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.
Reliance Securities also recommends avoiding the issue. As per the brokerage, the IPO is aggressively priced and hardly leaves anything meaningful on the table for investors in the medium-term perspective.