Elevate Campuses IPO gets 'neutral' call as valuations appear demanding

Elevate Campuses IPO: In the grey market, Elevated Campuses shares are trading at ₹367 apiece. This means that the listing gains could be 1.4 per cent.

Elevate Campuses IPO review: The initial public offering (IPO) of Elevate Campuses, an education infrastructure company engaged in owning, operating, and managing on-campus student accommodation, opened for bidding on Wednesday amid tepid views from brokerages and weak grey market trends. 

 

The ₹2,100-crore IPO will close for subscription on Friday, September 25. The price band for the offer is set at ₹343 to ₹362 per share, with the lot size for an application at 41 shares. 

 

Being entirely a fresh share sale, all proceeds will be received by the company, which it plans to deploy for the purchase of K-12 entities and campuses, repayment or prepayment of outstanding borrowings, funding acquisitions, strategic initiatives, and general corporate needs.

 

 

Should you apply to Elevated Campuses IPO?

ECL is India’s largest independent platform in the professionally managed student accommodation (PMSA) and education infrastructure segment, catering to 80,255 students across 15 Indian cities and one city in the UAE as of FY26. 

 

The company delivered revenue, Ebitda and adjusted PAT CAGR of 28 per cent, 37.4 per cent, and 17.6 per cent, respectively during the FY24-FY26 period, supported by portfolio expansion and operating scale. 

 

Going forward, growth will be driven by the addition of 2,128 beds at IIT Madras and UPES Dehradun combined, scaling of the asset-light managed portfolio and consolidation of 16 domestic K-12 assets, said SBI Securities. 

 

Despite the company's efforts to pay off ₹750 crore debt, the overall debt size remains elevated, it added. SBI Securities said that it would assign a 'neutral' rating to the issue and would like to track the performance of the company for a few quarters post-listing.

 

Analysts at Swastika said that much of the company's financials were driven by one-time gains. Furthermore, it flagged that half of the issue proceeds are earmarked for a related-party acquisition, with high leverage and 61 per cent concentration among the top three clients.

 

The FY26 PAT of ₹173.8 crore includes an exceptional gain of ~₹105 crore from the TAPMI/MAHE asset sale. Therefore, as per Swastika, core normalised PAT is around ₹68-70 crore, resulting in a core business P/E closer to ~85x-90x rather than the headline 35x P/E, meaning the valuation is demanding. The brokerage said that Elevated Campuses IPO is suitable for aggressive investors and assigned a 'neutral' call. 

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Elevated Campuses IPO GMP

In the grey market, Elevated Campuses shares are trading at ₹367 apiece. This means that the listing gains could be 1.4 per cent.

 

Elevated Campuses IPO bids

As of 12.40 PM, the offer was booked just 5 per cent on the first day of the book-building process. The non-institutional investor (NII) quota was booked 13 per cent and the retail segment received 8 per cent bids.

 

The qualified institutional buyer (QIB) portion did not see any bids yet. 

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