GNG Electronics, a prominent player in the refurbished electronics sector, made a strong debut on the stock exchanges today, July 30, 2025. The IPO listed at a premium of 49.7% over its issue price, generating significant interest and discussion among investors. The IPO price was ₹237 per share. On the NSE, the shares listed at ₹355, a 49.8% premium, while on the BSE, the opening price was ₹350, a 47.7% increase.

IPO Details and Subscription Status

The GNG Electronics IPO was a book-building issue worth ₹460.43 crores. The IPO comprised a fresh issue of 1.69 crore equity shares, amounting to ₹400 crore, and an offer for sale (OFS) of 25.5 lakh shares totaling ₹60.44 crore. The IPO was open for subscription from July 23 to July 25, 2025. The allotment was finalized on July 28, 2025.

The IPO witnessed substantial investor demand, being oversubscribed by 150.21 times overall. The qualified institutional buyers (QIBs) portion was subscribed 266.21 times, the non-institutional investors (NIIs) portion 226.44 times, and the retail investors portion 47.36 times.

Company Overview

GNG Electronics is India's largest refurbisher of laptops and desktops and among the largest refurbishers of ICT (Information and Communication Technology) devices globally. The company has a significant presence across India, the USA, Europe, Africa, and the UAE. GNG Electronics operates under the brand "Electronics Bazaar" and is involved in the entire refurbishment value chain, including sourcing, refurbishment, sales, after-sales services, and warranties.

Financial Performance and Key Ratios

GNG Electronics has demonstrated steady growth in its top and bottom lines. The company's revenue for FY24 was ₹1,411.58 Cr, with a net profit of ₹69.39 Cr. The Return on Equity (RoE) was 30.21%, and the Return on Capital Employed (RoCE) was 16.98%.

Factors to Consider

• Business Model: GNG Electronics operates in the commoditized business of refurbishing electronic devices. The average realization per device decreased by 22% in FY25, indicating a lack of pricing power.
• Changing Geographic Mix: There have been significant fluctuations in revenue from different geographic regions, which may raise concerns about the company's business model.
• Working Capital: The company's working capital condition deteriorated in FY25, with the inventory turnover ratio decreasing.
• Valuation: Some analysts believe that the IPO was aggressively priced.

Recommendation

Given the strong listing performance, investors who were allotted shares in the IPO have a few options:

• Hold: Investors with a long-term view and confidence in the company's growth potential may choose to hold onto their shares.
• Sell: Investors looking to book immediate profits may consider selling their shares, especially if they believe the current valuation is stretched.
• Buy: For investors who did not get an allotment, the strong listing may be tempting. However, a careful analysis of the company's fundamentals, business model, and valuation is crucial before making a decision. It would be prudent to wait for the stock to stabilize and assess its performance over the next few quarters before investing.