NEW DELHI: The initial public offering (IPO) of Varun Beverages PepsiCo 's largest franchise bottler, saw 36 per cent subscription by the first hour of Day 2 of the bidding process. The offer received bids for 73,43,728 shares against the total issue size of 1,76,50,000 shares till 11 am on Thursday.The qualified institutional buyers (QIBs) category saw 87.89 per cent subscription and the non-institutional investors category 18 per cent. We believe Varun is available at a fair valuation, considering the market growth opportunity and strong brand name associated with it,” the brokerage said.Globally, bottlers are listed in Mexico, Chile and trade at a PE of 30. Valuations look expensive compared with its global peers, which are trading at 33 times PE and 13.8 times EV/Ebitda. Investors can look at better levels to enter the stock post listing,” brokerage IIFL said in a note.Considering its inconsistent financial performance, low RoE, an asset-heavy business model and high valuation, we have a neutral rating on the IPO,” Angel Broking said.

Source: Economic Times October 27, 2016 06:00 UTC