By EduInvesting.in | May 5, 2025

The IPO market has witnessed a flurry of activity in recent months, especially in the SME space. While some offerings have garnered strong investor interest, others have struggled to find takers. One such case is the Wagons Learning IPO, which is currently open for subscription but has received a tepid response as it enters the second day of bidding. As of Monday, May 5, 2025 (11:04 AM), the issue was subscribed only 50%, raising concerns about its listing prospects.

Let’s break down the numbers, look at the grey market trends, and analyze what investors should consider before taking a call on this IPO.

🔍 Subscription Status: Cold Reception So Far

As per the latest data from the BSE SME platform, the Wagons Learning IPO has seen only 50% overall subscription by Day 2. Here’s how it breaks down:

The numbers are clearly underwhelming, especially in the retail category, which typically sees more traction in SME IPOs. The absence of interest from institutional buyers is also a red flag and reflects a lack of confidence in the company’s fundamentals or growth story.

📉 Grey Market Premium (GMP): Trading at a Discount

Adding to investor concerns is the Grey Market Premium (GMP), which reflects demand in the unofficial market. On Monday, unlisted shares of Wagons Learning were reportedly trading at ₹81, which is below the IPO’s upper price band of ₹82.

A GMP trading below the issue price generally indicates weak listing expectations. While GMP is not always a reliable indicator, it does provide a sneak peek into market sentiment, and in this case, the sentiment is lukewarm at best.

📋 IPO Details at a Glance

• Issue Type: SME IPO (Book-built)
• Opening Date: Friday, May 2, 2025
• Closing Date: Tuesday, May 6, 2025
• Issue Size: ₹38.38 crore
  • Fresh Issue: 30.9 lakh shares
  • Offer for Sale (OFS): 16 lakh shares
• Price Band: ₹78 – ₹82 per equity share
• Lot Size: 1,600 shares
  • Minimum Investment (Retail): ₹1,24,800
  • Minimum Investment (HNI): ₹2,62,400
• Listing Exchange: BSE SME platform
• Registrar: Cameo Corporate Services
• Lead Manager: Khandwala Securities
• Tentative Allotment Date: May 7, 2025
• Expected Listing Date: May 9, 2025

🧾 Use of IPO Proceeds

According to the Red Herring Prospectus (RHP), the company plans to utilize the fresh issue funds as follows:

• ₹7.5 crore for working capital requirements
• ₹4.5 crore for repayment or prepayment of certain borrowings
• Remaining funds for general corporate purposes

The OFS component will not bring any capital to the company but will provide partial exits to promoters Uday Jagannath Shetty and Raviraj Poojary, who are selling 8 lakh shares each.

🏢 Company Background: Who Is Wagons Learning?

Incorporated in October 2013, Wagons Learning is a Pune-based company specializing in corporate training and skill development solutions. Operating on a B2B (business-to-business) model, the company offers:

• Corporate training (sales, customer service, behavioral, functional)
• Digital learning solutions
• Trainer outsourcing and payroll services
• Skill development for various industries

Key Sectors Served:

• Automotive
• Banking & Financial Services (BFSI)
• Pharmaceuticals
• Healthcare

While the company has carved a niche in the corporate learning and development space, it operates in a highly fragmented and competitive market dominated by larger players and edtech platforms with deeper pockets.

🧠 What’s Weighing Down the IPO?

Several factors may be contributing to the lackluster investor interest in the Wagons Learning IPO:

1. High Entry Barrier for Retail Investors

The minimum retail investment of ₹1.24 lakh for a single lot is steep for many individual investors, especially in the SME segment.

2. Weak GMP

The ₹1 discount in the grey market (₹81 vs. ₹82 issue price) may deter short-term investors looking for listing gains.

3. Limited Institutional Backing

No bids from QIBs as of Day 2 suggest that the smart money is staying away.

4. Modest Financials and Scale

The company, though over a decade old, is still relatively small and hasn’t showcased exponential growth or market capture that would excite investors.

5. High Competition

The corporate training space is crowded with edtech startups, global consulting firms, and digital content providers. Wagons Learning has to compete not just on quality but also on pricing and scalability.

📊 Valuation Check

With the price band of ₹78–₹82, investors might want to examine valuation metrics like P/E, P/BV, and EBITDA margins before subscribing. Unfortunately, detailed financials haven’t been widely circulated, which makes analysis difficult for retail investors.

A lack of transparent data and analyst coverage adds to the overall skepticism.

✅ Should You Subscribe to Wagons Learning IPO?

Only for Risk-Takers.

If you are a retail investor seeking listing gains, this IPO might not be the right fit. The low subscription, discounted GMP, and high entry cost make this issue unattractive for conservative investors.

However, if you believe in the long-term potential of the corporate training sector and are comfortable with the risks involved in SME stocks, you might consider applying—but ideally after seeing how Day 3 subscriptions pick up.

📅 Important Dates to Remember

📌 Final Thoughts

The Wagons Learning IPO has started off on a weak footing. Unless there’s a surge in demand on the final day, there’s a strong chance the issue might not be fully subscribed, which could either delay the listing or affect market sentiment post-listing.

At EduInvesting.in, our take is simple: wait and watch. Let the Day 3 subscription numbers speak before committing capital, especially when safer SME and mainboard IPOs are lining up in the coming weeks.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should consult with their financial advisors before making any investment decisions.