Why Gaja Alternative IPO stands out among three ongoing public offers

For Gaja Alternative Asset Management, Ventura recommends an 'Apply' for investors with a three-year or longer investment horizon.

With three initial public offerings (IPOs), namely Gaja Alternative Asset Management, Shankesh Jewellers and Sunshine Pictures, seeking investor money this week, the key question is where investors should place their bets.

 

Analysts prefer Gaja Capital among the three offers for its strong fundamentals and as other ongoing IPOs face earnings quality risks.

 

IPO watch: Gaja vs Shankesh vs Sunshine Pictures

For Gaja Alternative Asset Management, Ventura recommends an ‘Apply’ with a three-year or longer investment horizon as it sees an asset-light business with operating leverage, although the roughly 27.5-times earnings valuation is not inexpensive.

 

The company reported a 28 per cent revenue growth and 32 per cent growth in profit after tax (PAT) in FY26, with a net margin of 52 per cent and a low debt-to-equity ratio of 0.07.

 

Gaja Alternative Asset Management’s IPO opened August 19, and it is looking to raise ₹550 crore via its initial share sale. The IPO is a mix of a fresh share sale of ₹450 crore and an offer for sale of ₹100 crore. The IPO price band is set at ₹152 to ₹160 per share.

 

Meanwhile, Shankesh Jewellers also gets a ‘Pass’ from Ventura. In FY26, its profit rose 165 per cent to ₹107 crore and Ebitda margin stood at 9.7 per cent, which the brokerage believes are largely due to ongoing robust gold price cycle.

 

It sees limited differentiation in the business, particularly when compared with Lalithaa’s larger retail network, scale and customer franchise. Low institutional participation is another concern, Ventura said. The IPO opened for bidding on August 18 and will conclude on August 20.

 

Shankesh Jewellers' IPO is a mix of a fresh issue of ₹274.18 crore and an offer for sale of ₹93 crore. The company plans to use the funds raised via fresh share sale for repayment of debt, meeting working capital needs, and general corporate purposes. The price band for the offer has been fixed at ₹88 to ₹93 apiece. Investors can apply for the offer in lots of 160 shares.

 

Lastly, Sunshine Pictures IPO is a ‘Strong Pass’ for Ventura given the volatility of its earnings and valuation. The company's revenue declined from ₹139 crore in FY24 to ₹76 crore in FY26, even as profit increased to ₹40 crore. The brokerage views the business as hit-driven, making earnings difficult to predict.

 

At around 28 times earnings and 6.5 times book value, Ventura believes the valuation does not provide enough cushion against a weak content cycle. The absence of institutional participation and reliance on retail and HNI demand also add to the risk.

 

The IPO opened on August 18 and will conclude on August 20. The company has set the issue price band at ₹342 to ₹360 per share. At the upper end of the price band, Sunshine Pictures is valued at an implied post-issue market capitalisation of around ₹1,121 crore. The ₹282 crore IPO comprises a fresh issue of 48 lakh equity shares and an OFS of 30.37 lakh equity shares, taking the total offer size to 78.37 lakh shares.

 

Abhinav Tiwari, research analyst, Bonanza, echoed a similar sentiment, noting that among the three ongoing IPOs, the outlook remains positive for Gaja Alternative Asset Management. The other two, Shankesh and Sunshine, carry earnings quality risks and are better approached cautiously.

 

Tiwari said its main attraction is the high management fee income and strong track record. "New funds could increase AUM and future fee income. However, recurring management fees have declined, while carried interest now contributes almost half of income. Gaja is the most attractive for a long-term investor,” he said.

 

Disclaimer: Views and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.