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hoac foods ipo

HOAC Foods IPO  Subscribed Over 19x on Day 1 – 10 Key Investor Questions Answered

The busy IPO season continues! As mainboard and SME profiles both buzz with activity, another name is all set to enter Dalal Street with its IPO in the latter category: Hari Om Atta & Spices (HOAC). This IPO spiced up the market, opening on 16 May 2024, with more than 19 times subscriptions on Day 1. HOAC Foods’ fixed price issue is worth ₹5.54 crore. 

As always, thorough research is crucial before making any investment decisions. Delve deeper into Hari Om Atta & Spices’ financials, growth strategy, and future prospects to determine if this IPO aligns with your investment goals. Stay tuned as we explore the details of this upcoming spice route to potentially high returns!

HOAC Foods IPO Details

IPO Date16 May 2024 to 21 May  2024
Face Value₹10 per share
Price₹48 per share
Lot Size3,000 Shares
Issue SizeFresh Issue of 1,155,000 shares
(aggregating up to ₹5.54 Cr)
Issue TypeFixed Price Issue 
Source: NSE

The IPO offers the following:

  • Entirely Fresh Issue: HOAC Foods’ upcoming IPO is a fixed-price offering of ₹5.54 crore, consisting entirely of 11.55 lakh new equity shares, so there is no Offer for Sale (OFS).
  • The IPO’s Objective: HOAC Foods intends to use the money raised to fund the company’s working capital requirements and general corporate purposes. 
  • Category-wise Subscription: So far, the IPO has been subscribed 34.29 times in the retail category, while the Non-Institutional Investors (NII) category registered 5.21 times subscription.

HOAC Foods IPO GMP:

As of this morning (17 May 2024), HOAC Foods’ Gray Market Premium (GMP) IPO was ₹100. This has been consistent since the opening’s Day 1 and shot up from ₹75 the previous day. However, note that the GMP only unofficially indicates investor interest in the unlisted market. It’s not a guaranteed future price. 

Company Overview:

Founded in 2018, HOAC Foods manufactures flour, spices, and other food products. It offers a range of products such as chakki atta (flour), herbs and spices, unpolished pulses, grains, and yellow mustard oil. Primarily catering to Delhi-NCR through a network of 10 exclusive brand outlets, it comprises a mix of company-owned and franchised locations.

The company operates a production facility in Gurugram and has a product line of 153 SKUs (Stock Keeping Units) encompassing ground and blended spices. As of December 31, 2023, HOAC Foods employs 50 individuals across various departments, contributing to its operations and growth.

Financial Performance in Three Years

Hariom Atta & Spices has consistently shown positive financial growth in the past three financial years and the latest quarter that ended 31 December 203.  Its revenue from operations has shot up from ₹7.42 crores in FY2021 to ₹10.87 crores in FY2022 to ₹12.09 crores in FY2023.

The total revenue in December 2023 stood at ₹11.49 crores. As for its Profit After Tax (PAT) has doubled yearly, from ₹12.85 lakhs in FY2021 to ₹27.33 lakhs in FY2022 to ₹58.79 lakhs in FY2023. The PAT recorded in December 2023 was ₹74.50 lakhs

image 20
Source: NSE

SWOT Analysis Of HOAC Foods

STRENGTHSWEAKNESSES
Strong Brand Recognition: HOAC Foods has established a strong brand presence in the Delhi-NCR region with exclusive networks. The localized focus caters to specific customer preferences and builds brand loyalty.
Diverse Product Portfolio: The company’s product line includes staples like chakki atta, spices, pulses, and mustard oil, offering a one-stop shop for essential food items.
Growth Potential: The company’s operational revenue has grown consistently over the past three years, indicating a promising trajectory.
Manufacturing Facility: Their production facility in Gurugram allows for quality control and potentially quicker turnaround times.
Franchise Model: Utilizing a franchise model can expedite expansion and reduce upfront investment costs for additional outlets. 		Limited Geographic Reach: Since it operates solely in the Delhi-NCR region, the company’s overall market share and growth potential compared to national competitors is restricted.
Dependence on Franchisees: Though franchising offers advantages, maintaining brand consistency and quality control across all outlets becomes challenging.
Relatively New Company: Founded in 2018, HOAC Foods is relatively young compared to established market players.
Limited Marketing Reach: Being a new business in the market limits its brand awareness and consumer trust nationwide. Besides, with a dedicated sales and marketing team of only 12 people, it may struggle to compete with established players with bigger marketing budgets and reach.
OPPORTUNITIESTHREATS
Expansion into New Markets: The existing brand recognition and product diversification can enable the company to expand beyond Delhi-NCR. This could mean new outlets or franchises in other regions.
E-commerce Presence: HOAC sells products online, but partnering with online retailers could increase its customer reach and build a wider user base.
Product Line Extension: New products, like ready-to-eat mixes or organic options, could attract new customer segments and boost sales.
Strategic Partnerships: Collaborating with other food companies, distributors, or ingredient suppliers could provide HOAC Foods access to more resources and lower production costs.		Stiff Competition: The Indian food market is highly competitive, with established national and regional players. HOAC Foods will need continued innovation and differentiation to maintain an edge.
Fluctuations in Raw Material Costs: Rising prices of spices, pulses, and other agricultural commodities could affect profit margins.
Consumer Preferences: Changing consumer preferences towards organic or healthier food options may necessitate product adjustments or marketing strategies to remain relevant.
Economic Downturn: Economic fluctuations could impact consumer spending and potentially decrease demand for their products.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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Go Digit's ₹2,615-Crore IPO Issue Opens Today: 10 Key Things to Know Before Investing

Go Digit’s ₹2,615-Crore IPO Issue Opens Today: 10 Key Things to Know Before Investing

There’s enough and more to keep Dalaal Street on its toes, with several IPOs opening and companies listing this week. One of those is Go Digit General Insurance, which intends to raise an enormous ₹2,615 crore. However, you must carefully look at all the IPO details before deciding. Find out more about the company’s financials and other information before investing. 

Go Digit General Insurance IPO details

Offer Price₹258 to ₹272 per share
Face Value₹10 per share
Opening Date15 May 2024
Closing Date17 May 2024
Total Issue Size (in Shares)54,766,392
Total Issue Size (in ₹)₹2,615 crore
Issue Type Book Built Issue IPO
Lot Size55 Equity Shares and multiples thereafter

Here’s what the IPO offers:

  • Fresh Issue & Offer for Sale (OFS): The IPO combines a fresh issue of 4.14 crore shares aggregating ₹1,125.00 crores with an OFS of 5.48 crore shares aggregating ₹1,489.65 crores.
  • Objective: The company plans to use the net proceeds to continue its business activities and enhance its visibility and brand image among its existing and potential customers.
  • Investor Allocation: Up to 75% of the IPO shares are reserved for institutional investors (QIBs), while retail investors get not more than 10%, and non-institutional investors (NIIs) get 15%.

GO Digit General Insurance IPO GMP

As of 15 May 2024, the Gray Market Premium (GMP) of Go Digit General Insurance IPO was ₹47. The GMP is an unofficial indicator of investor interest in the unlisted market, not a guaranteed future price. 

Company Overview

Launched in 2017, Go Digit is an insurance company offering car, health, and various other types of coverage, including travel, business, home, and life insurance. So far, the company has a customer base of 3 crore. This company, supported by celebrities Virat Kohli and Anushka Sharma, has 74 insurance products across various business lines. Its distribution network comprises over 61,972 partners, including agents, brokers, and Point-of-Sale Persons (POSPs). The insurer also leverages technology for convenient product access through a user-friendly website and partnerships with web aggregators.

Gradually Improving Financial Performance

The company had a rough two years, as it clocked ₹122.76 crore loss after tax in FY2021, which increased to a loss of ₹295.85 crore in FY2022. However, Go Digit then had a profit after tax (PAT) of ₹35.55 crore in FY2023, and for nine months ended 31 December 2023, the PAT increased to ₹129.02 crore. 

image 17
Source: DRHP

SWOT Analysis of Go Digit General Insurance

STRENGTHSWEAKNESSES
Growing Insurance Market: The Indian insurance industry will likely grow considerably soon, presenting a large potential customer base for Go Digit.
Expansion of Product Portfolio: Go Digit can expand its products to reach a broader range of customer needs, including new insurance categories and value-added services.
Partnerships: Collaborating with other companies can help Go Digit reach new customer segments and expand its distribution network.
Technological advancements: Leveraging new technologies like AI and big data can improve risk assessment, pricing models, and customer service. 		Limited Product Portfolio: Compared to other established insurers, Go Digit offers a smaller range of insurance products, especially in non-motor segments.
Profitability: The company made losses until 2023, which raises concerns about long-term financial sustainability.
Reliance on motor insurance: A major portion of its revenue comes from motor insurance, making it vulnerable to fluctuations in the auto market.
Limited brand experience: The lack of physical branches might limit customer reach, especially for those less comfortable with online transactions.
Recent Player: Compared to seasoned companies, Go Digit is a relatively newer entity, which might raise questions about its long-term stability for some.
OPPORTUNITIESTHREATS
Growing Insurance Market: The Indian insurance industry will likely grow considerably soon, presenting a large potential customer base for Go Digit.
Expansion of Product Portfolio: Go Digit can expand its products to reach a wider range of customer needs, including new insurance categories and value-added services.
Partnerships: Collaborating with other companies can help Go Digit reach new customer segments and expand its distribution network.
Technological advancements: Leveraging new technologies like AI and big data can improve risk assessment, pricing models, and customer service. 		Increased competition: The Indian insurance sector is becoming increasingly competitive, with seasoned players and startups vying for market share.
Regulatory changes: Changes in government regulations might impact its business model or product offerings.
Economic downturns: Economic slowdowns can lead to decreased demand for insurance products.
Cybersecurity threats: As a digital-first company, Go Digit is especially vulnerable to cyberattacks that could compromise customer data or disrupt operations.

Go Digit has strengths and weaknesses and has seen considerable ups and downs since its inception. Considering this, even if the IPO market seems exciting, it’s best to Be mindful while investing. Weigh the pros and cons before deciding whether the Go Digit IPO must be added to your portfolio. Thoroughly research before investing in this or any IPO. Consult with a financial advisor to make an informed decision.

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*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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Top IPOs in Dec 2023

2023’s Top 13 IPO Winners: Read Who Made It to the List

2023 was a golden year for the Indian stock market, especially for those who dared to dive into the exciting world of IPOs. Think of the frenzy, the anticipation, and the thrill of that first trading day! You might be sitting on a gold mine right now if you participated. But even if you weren’t part of the action, there’s still valuable wisdom to be learned from the market’s winners. The real breakout stars were on the mainboard, where, out of the 60 companies that went public, 13 saw their share prices soar. So, let’s take a look at their fabulous performance.

image 2
Source: NSE

1. IREDA: The Undisputed Champion

Taking the lead position is IREDA, a renewable energy financing company. IREDA’s IPO opened at ₹138 and rocketed to a whopping ₹835 within a year, a gain of a mind-blowing 490%! That’s right if you had invested ₹1 lakh in IREDA at the IPO, you’d be sitting on a cool ₹6.35 lakh today.

2. Motisons Jewellers: Shining Bright

Jewelry might not be the first thing that comes to mind when you think of high-growth industries, but Motisons Jewellers proved otherwise. This Kolkata-based jeweler saw its share price zoom from ₹750 at IPO to ₹2,700, a stellar 260% return. So, if you were looking for some sparkle in your portfolio, Motisons definitely delivered!

3. Signature Global: Building a Fortune

Real estate developer Signature Global lived up to its name, growing its share price by an impressive 251% in 2023. The company’s IPO price was ₹145, and it reached a high of ₹508 within a year. This means that a ₹1 lakh investment at the IPO would have grown to a healthy ₹3.51 lakh. Not bad for a brick-and-mortar business!

4. Cyient DLM: Engineering Profits

Engineering and design company Cyient DLM made a strong debut, with its share price rising from ₹245 at IPO to ₹800, a commendable 228% gain. This translates to a potential ₹4 lakh return on a ₹1 lakh investment.

5. Utkarsh Small Finance Bank: Banking on Growth

Utkarsh Small Finance Bank (USFB) hit the ground running in March 2023, raising a cool ₹53.92 billion. But here’s the kicker: its share price zoomed 47% on the listing day itself! Rising from an offer price of ₹25 to its current ₹60, it has climbed a whopping 240% by February 2024. Talk about making an entrance!

6. Netweb Technologies: Weaving a Digital Net

Netweb Technologies, a leading IT infrastructure solutions provider, joined the party in April 2023, pulling in ₹541.15 crore. Their listing day saw a modest 11% jump, but that was just the beginning. By February 2024, the stock had skyrocketed a staggering 431%, from an offer price of ₹500 to its current ₹1394, making it one of the top gainers on the mainboard.

7. EMS: Delivering Value, Literally

Coming in hot in August 2023, Ecom Express Limited (EMS) raised ₹1,489 crore through its IPO. While the listing day saw a moderate 8% rise, things really took off in the following months. As of today, the stock has surged a remarkable 292%, standing tall at ₹574 from its original offer price of ₹211, leaving many investors pleasantly surprised.

8. Senco Gold

This jewelry manufacturer struck gold (pun intended!) with its IPO, opening at a 28% premium and closing its first day up a staggering 49%. This stellar performance wasn’t a flash in the pan, as the stock continued its upward trajectory, currently sitting 148% at ₹788, above its offer price of ₹317. Talk about a golden opportunity!

9. Vishnu Prakash R Punglia

The steel pipes and tubes manufacturer made a strong entrance, listing at a 38% premium and ending its debut day with a 53% gain. It hasn’t stopped there, currently boasting a 129% increase at ₹219 over its issue price of ₹99. Seems this IPO was anything but hollow!

10. Global Surfaces

A company dealing in decorative laminates and surfacing solutions made a stylish debut, opening at a 22% premium and closing its first day up 30%. The upward trend has continued, with the stock currently trading at ₹310 which is 71% above its offer price of ₹140. Looks like they’ve truly surfaced as a market leader!

11. Tata Technologies

This engineering services giant entered the scene with a bang, listing at a 14% premium and closing its first day up 18%. While its journey hasn’t been as meteoric as the others, it’s still a solid performer, currently trading at ₹1114, 29% above its offer price of ₹500. A testament to their technological strength!

12. Mankind Pharma

A pharmaceutical company, it proved that good health is good business, opening at a 53% premium and ending its first day with a phenomenal 67% gain. It hasn’t slowed down either, currently showing a 140% increase at ₹2249 over its offer price of ₹1080. This IPO was definitely a healthy dose of success!

13. Concord Biotech

This biopharmaceutical company specializing in oncology treatments entered the market with a 47% premium and closed its first day up a remarkable 64%. While it experienced some volatility, it’s currently trading at ₹ 1475, 44% above its offer price of ₹741. This company’s future looks bright, like the hope they provide to patients!

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What made these superstars shine?
Well, the reasons are as varied as the companies themselves. Some, like IREDA, benefited from riding the wave of growing interest in renewable energy. Others, like Motisons Jewellers, capitalized on India’s strong demand for luxury goods. And still others, like Cyient DLM, offered investors exposure to hot sectors like technology and infrastructure.

So, what can we learn from these IPO champions? Well, it’s important to do your research before investing in any IPO. Don’t just get caught up in the hype; take the time to understand the company, its business model, and its risks. And remember, even the best IPOs can be volatile, so be prepared for some ups and downs along the way.

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dec blogs 9 whats happened with idea forge after the ipo

What Happened After ideaForge IPO Launch?

Introduction

Drones are gaining importance in various sectors like defense, security, agriculture, and industrial inspection. They provide real-time information and reduce human intervention. Due to their efficiency and safety, there is a high demand for drones in the market.

IdeaForge is a leading drone manufacturer that produces advanced UAV solutions for various applications. Their products provide surveillance, reconnaissance, and data collection capabilities in diverse environments.

The initial public offering (IPO) was in late June 2023, at a range of ₹638 to ₹672. Investors responded enthusiastically to the public offering, leading to a substantial listing premium on BSE and NSE in July 2023. This article will examine how ideaForge has fared after its IPO.

Brief Overview of ideaForge

ideaForge Technology Limited (“ideaForge”) was incorporated on February 8, 2007. ideaForge is the pioneer and the pre-eminent market leader in the Indian unmanned aircraft systems (“UAS”) market, with a market share of approximately 50% in FY2022.

It had the largest operational deployment of indigenous UAVs across India, with an ideaForge-manufactured drone taking off every five minutes on average for surveillance and mapping as of FY2023.

Business Overview of ideaForge

The company has ranked 7th globally in the dual-use category (civil and defense) drone manufacturers as of December 2022. During the Q2FY24 ideaForge has bagged new orders worth INR 169 cr. In addition to being among the 1st few players in India to enter the UAV market, ideaForge also has the distinction of being the 1st company to indigenously develop and manufacture vertical take-off and landing (“VTOL”) UAVs in India in 2009.

The company possesses an in-house product development center that enables it to internally handle the design, development, engineering, and manufacturing of its UAVs, emphasizing performance, reliability, and autonomy.

Upon listing, ideaForge IPO was priced at ₹1,305 on BSE and ₹1,300 on NSE. The IPO successfully attracted investor attention across categories. From auctions to qualified consumer institutions (QIBs), it was subscribed 106.05 times ~ 94% due to strong interest rates. But what happened to the company after listing?

Financials of ideaForge

ideaForge Technology announced its Unaudited Financial Results for the Quarter ended 30th September 2023. The details are mentioned in the table below.

Key Financial Highlights table

Particulars (INR Mn)Q2 FY24Q2 FY23Q1 FY24H1 FY24H1 FY23H1 Y-o-Y
Revenues237.3402.8970.71208.01395.5-13.4%
Gross Profit100.0276.1539.2639.21,014.0-37.0%
Gross Profit (%)42.1%68.6%55.5%52.9%72.7%
EBITDA70.498.2320.3390.8659.5-40.7%
EBITDA Margins (%)29.7%24.4%33.0%32.4%47.3%
Profit After Tax8.939.7188.6197.6452.1-56.3%
PAT Margins (%)3.8%9.8%19.4%16.4%32.4%
Source: ideaForge

During the Q2FY24 IdeaForge has bagged new orders worth INR 169 Cr.

  • The revenue contribution from Civil business increased in Q2 FY24
  • ideaForge drones completed a cumulative of 400K+ flights on the field
  • Product demonstrations to the end customers, along with VARs in the United States
  • Dun & Bradstreet Business Excellence Award 2023, and SIDM Champion Award for
    ‘Technology and Product Innovation’
  • ConnectXchange initiative for MHA and MOD to increase product adoption

Revenue

The consolidated revenue from operations for the quarter of September 2023 stood at INR 23.7 crores, a decrease of 41% on a year-on-year basis. For H1 ’24, the revenue from operations was at INR 120.8 crores, decreasing 13.4% on a year-on-year basis. According to the results, the revenue contribution from civil business increased in Q2 FY24. During the quarter under review, the company earned 69% of its revenue from defence contracts, while the remaining 31% came from civil business.

image 22
Source: NSE

EBITDA

The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) stood at Rs 7 crore in Q2 FY24 against Rs 9.82 crore in Q2 FY23. For H1 ’24, EBITDA was 39.1 crores at 32.4%.

image 23
Source: BSE

Net Profit

According to the latest corporate filing, ideaForge’s profit after tax (PAT) tanked more than 78% year-on-year (YoY) to INR 0.89 crores in Q2FY24 due to a sharp decline in revenue. The firm had posted a PAT of Rs 3.97 crore in the year-ago period.

Future Ahead for ideaForge

During one of the interviews, the CEO of ideaForge, Ankit Mehta stated this quarter was the performance phase for the company. Highlighting the importance of vertically integrated operations and indigenization efforts, highlighting their role in ensuring the quality and reliability of delivered mission-critical UAVs. The order book has improved on the back of new orders received in Q2 FY24

1-Year Performance

The stock was listed with a bumper opening at 1,305 on BSE and ₹1,300 on NSE. In January 2024, it is listed at around ₹758. ideaForge share price has failed to provide positive returns to investors since its listing despite a stellar debut in the market.

image 24

In conclusion, IdeaForge’s post-IPO journey has been a roller coaster marked by challenges and achievements. Investors and analysts are watching its performance closely as the company prepares to announce its Q3 results.  Despite recent challenges, ideaForge remains a strong contender in the drone market.

The probable factors that are affecting the ideaForge share price growth are as follows:

Valuation of Stock:
Some investors expressed concerns about the company’s shrinking order book when it listed for the IPO. The company explained that this was due to major contract delays in executing major contracts and completing contracts. Despite the improvements, analysts remain optimistic long-term, crediting the company’s strong products and brand recognition.

Many Offering:
ideaForge serves a varied customer base, with a primary focus on the defense and civil sectors. Drones are essential in defense, providing crucial surveillance capabilities and improving security and reconnaissance efforts. In the civil sector, these drones are utilized for surveillance and mapping, presenting innovative solutions across various industries.

Overcoming obstacles and securing self-reliance:
The drone sector is experiencing significant growth and rapid transformation, albeit at an early stage of development. Unlike many industries with occasional dramatic technological shifts, drone technology undergoes continuous evolution, demanding ongoing innovation. Remarkably, ideaForge distinguishes itself by reducing reliance on imported components. Recent apprehensions regarding potential restrictions on component supplies from China have spurred the company to ensure that imports account for only 15-20% of its revenues.

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International growth and financial prospects:
Although the company’s export revenue is currently in the single digits, ideaForge is committed to its global expansion strategy. The company has strategically broadened its presence through a network of reseller partners. Without immediate plans for capital investment, ideaForge is maximizing its existing capacity to manufacture quadcopters and switch drones efficiently. The focus is on enhancing the value of its product offerings through planned initiatives.

Read More: Grey Market Premium

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

FAQs

  1. What led to Idea Forge’s share price decline post-IPO?

    The decline is attributed to concerns about high valuation and weak performance in the first and second quarters of FY24.

  2. Why did Idea Forge’s order book shrink despite operating in the defense sector?

    The company clarified that the drop in the order book was due to the fulfillment of large contracts and delays in closing certain deals. They expect the numbers to change in the next quarter, and the analysts are closely monitoring the Q3 results.

  3. What factors contribute to analysts’ optimism about Idea Forge’s future potential?

    Analysts cite a healthy order book, modest earnings multiple, and the company’s strong product line and brand recognition as reasons for optimism.

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Jyoti CNC Automation IPO: 7 IMP Things To Know

Jyoti CNC Automation IPO: 7 IMP Things To Know

Introduction

2024 starts with a bang as Jyoti CNC Automation Limited announces its Initial Public Offering (IPO), marking the beginning of the IPO season. This Indian-based company specializes in designing, producing, and distributing CNC machinery, making it a significant player in the manufacturing sector.

Jyoti CNC Automation IPO Details

IPO DateJanuary 9 to 11, 2024
Face Value₹2 per share
Price Band₹315 to ₹331 per share
Lot Size45 Shares
Fresh Issueup to ₹1,000.00 Cr
Employee DiscountRs 15 per share
Source: Chittorgarh

About Jyoti CNC Automation Limited

Jyoti CNC Automation Limited, headquartered in India, boasts an impressive product line. From multitasking machines to 3-axis and 5-axis CNC machining centers, turning centers, turning-milling centers, vertical machining centers (VMCs), and horizontal machining centers (HMCs), the company covers a broad spectrum in the CNC machinery domain.

The company has a diverse customer base which includes renowned names such as Indian Space Applications Center – ISRO, BrahMos Aerospace Thiruvananthapuram, Turkish Aerospace, Uniparts India, Tata Advances System, Tata Sikorsky Aerospace, Bharat Forge, Shakti Pumps (India), Shreeram Aerospace & Defense, Rolex Rings, Harsha Engineers, Bosch Limited, HAWE Hydraulics, Festo India, Elgi Rubber, National Fittings, and many others.

Also Read: CNC Full Form in Share Market

Key Things to Know About Jyoti CNC Automation IPO

  1. Lot Size: The lot size for the IPO is 45 equity shares, multiples of 45 after that. Allocation is 75% for qualified institutional buyers, 10% for retail investors, and 15% for non-institutional investors.
  2. Anchor Investors: The allocation to anchor investors was scheduled for Monday, January 8.
  3. IPO Details: The ₹1,000 crore Jyoti CNC IPO is a fresh issue with no offer for sale (OFS) component.
  4. IPO Objectives: The company plans to utilize the net proceeds for working capital needs, loan repayments, and general corporate purposes.
  5. Visibility and Brand Image: Jyoti CNC Automation anticipates benefits from listing equity shares, enhancing visibility, and creating a public market for its shares.
  6. Lead Manager and Registrar: Equirus Capital Private Limited, ICICI Securities Limited, and SBI Capital Markets Limited are the book-running lead managers, with Link Intime India Private Ltd as the registrar.
  7. IPO Reservation: The IPO reserves 75% for qualified institutional buyers (QIB), 15% for non-institutional Institutional Investors (NII), and 10% for retail investors. A ₹15 per equity share discount is offered to eligible employees bidding in the employee reservation portion.
  8. Listing Date and Allotment: The basis of allotment could be finalized on Friday, January 12, with refunds initiated on Monday, January 15. Shares will be credited on the same day; tentatively, the listing is expected on Tuesday, January 16.

Key Players and Promoters

The driving force behind Jyoti CNC Automation is its promoters – Vikramsinh Raghuvirsinh Rana, Parakramsinh Ghanshyamsinh Jadeja, Sahdevsinh Lalubha Jadeja, and Jyoti International LLP. Their leadership has steered the company towards success, which is evident in its three manufacturing facilities in Rajkot, Gujarat (India), and Strasbourg, France.

Financial Performance and Growth

As of September 2023, Jyoti CNC Automation’s order book reached an impressive ₹3,315 crore, showcasing its substantial presence in various end-user industries. The fiscal years ending in March 2023 and March 2022 witnessed a remarkable 27% increase in revenue and a staggering 131.18% rise in profit after tax (PAT).

Peers

To understand Jyoti CNC Automation’s standing in the market, let’s compare it with some listed peers. According to the Red Herring Prospectus (RHP), the company competes with Elgi Equipments Ltd, Lakshmi Machine Works Ltd, Triveni Turbine Ltd, TD Power Systems Ltd, and Macpower CNC Machines Ltd.

Grey Market Premium and Estimated Listing Price

The Grey Market Premium (GMP) for Jyoti CNC IPO was +85, indicating a trading premium of ₹85. Considering the upper end of the IPO price band, analysts estimate the listing price could be ₹416 apiece, marking a substantial 25.68% increase.

Checking the company’s financials, diverse product range, and market indicators before investing in the Jyoti CNC Automation IPO is essential. Want to learn more? Check the DRHP here.

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*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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A Complete Guide to Understand Initial Public Offerings

A Complete Guide to Understand Initial Public Offerings (IPOs)

Introduction

Initial Public Offerings (IPOs) have become a buzzword in the financial world, offering companies a pathway to public funding and investors an opportunity to participate in a company’s growth story. Understanding what an IPO is is essential for both, companies planning to go public and investors. 

What is an IPO? An Overview for Beginners

An IPO is the process through which a privately held company offers its shares to the general public for the first time. This transition marks the company’s debut in the stock market, allowing it to raise capital for expansion, innovation, or debt repayment. IPO definition, process & more details are covered in this article. 

Why IPOs Play a Key Role in the Stock Market Ecosystem

IPOs are crucial in connecting businesses with investors. They enable companies to access public funds while giving investors the opportunity to own equity in promising enterprises. This synergy fuels economic growth, fosters innovation, and creates wealth for stakeholders.

What is an IPO?

Definition of IPO: Understanding the Full Form of Initial Public Offering

The full-form of IPO is “Initial Public Offering.” It is a financial mechanism through which a private company offers its shares to public investors for the first time, transitioning from a private entity to a publicly traded company.

Why Companies Go Public: Key Reasons Behind IPO Launches

Companies opt for IPOs for several reasons, including:

  1. Raising capital to fund growth and expansion.
  2. Reducing debt burdens.
  3. Enhancing market visibility and credibility.
  4. Providing liquidity to early investors and founders.

What IPO Means for Retail and Institutional Investors

For retail investors, an IPO provides a chance to invest in a company’s growth story early. Institutional investors benefit from large-scale investments, leveraging their resources for potential high returns. Understanding what an IPO is in the stock market helps investors align their strategies with these opportunities.

How Does the IPO Process Work?

The Lifecycle of an IPO: From Private Company to Stock Market Listing

  1. Company Prepares to Go Public The journey begins with the company’s decision to go public, often driven by the need for substantial capital or liquidity for existing shareholders.
  2. Drafting the Red Herring Prospectus (RHP) and SEBI Approval The company prepares the RHP, detailing its business model, financials, and objectives for raising funds. SEBI reviews the document to ensure compliance with regulations.
  3. Determining the IPO Price: Fixed Price vs Book-Building The company and its underwriters set a price or a price band for the shares. Fixed Price IPOs have a predetermined price, while Book-Building IPOs determine the final price based on investor demand.
  4. Investor Subscription and IPO Bidding Process Investors bid for shares within the specified price band. The demand generated during this period often influences the final price.
  5. Share Allotment and Stock Market Listing: Shares are allotted to investors based on their applications, and the company’s stock begins trading on the stock exchange. This critical step is key in the IPO process.

Also Read: IPO Allotment Process: The Complete Guide

Types of IPOs in the Share Market

1. Fixed Price IPO: A Structured Pricing Model

In a Fixed Price IPO, the price of shares is predetermined and disclosed upfront to investors.

2. Book-Building IPO: A Flexible Pricing Mechanism

In a Book-Building IPO, investors bid for shares within a specified price band, and the final price is determined based on demand.

Comparing Fixed Price IPOs and Book-Building IPOs: Key Differences

CriteriaFixed Price IPOBook-Building IPO
Pricing TransparencyFully transparentPartially flexible
Investor FlexibilityLowHigh
Risk of OverpricingModerateVariable

Why Should Investors Consider IPOs?

1. Early Investment in High-Growth Companies

Understanding what an IPO is provides an opportunity to invest in companies during their growth phase, often at favorable valuations.

2. Opportunity for Higher Returns on Listing Day

Listing day gains can be significant if the IPO is oversubscribed and demand remains strong.

3. Long-Term Portfolio Diversification

Adding IPO stocks to an investment portfolio enhances diversification and offers exposure to emerging industries and companies.

Risks of Investing in IPOs

1. Market Volatility After Listing: Managing Expectations

Stock prices can be highly volatile post-listing, influenced by market sentiment and external factors.

2. Overvalued IPOs: The Need for Fundamental Analysis

An overhyped IPO may lead to overvaluation, making it crucial for investors to analyze the company’s fundamentals before investing.

3. Partial Allotment Due to Oversubscription

In highly popular IPOs, retail investors may receive only a portion of the shares they applied for.

How to Invest in an IPO Step-by-Step

  1. Opening a Demat and Trading Account for IPO Applications A Demat account is essential to hold shares, while a trading account facilitates the application process.
  2. Applying for IPO Shares via ASBA and UPI Investors can apply through the ASBA (Application Supported by Blocked Amount) facility or UPI-enabled platforms for a seamless experience.
  3. Tracking IPO Subscription and Allotment Status Investors can track subscription data and check their allotment status online. Accurate IPO information is vital during this stage.

Key IPO Terminology Every Investor Should Know

  1. Issue Price vs Listing Price The issue price is the price at which shares are offered to the public, while the listing price is the price at which the stock begins trading.
  2. Grey Market Premium (GMP) and Its Impact on IPO Performance GMP indicates the demand for an IPO in the unofficial market and often reflects investor sentiment.
  3. Cut-Off Price and Price Bands: How They Work The cut-off price is the final price determined in a Book-Building IPO, while the price band sets the range within which investors can bid.
  4. Oversubscription and Under-subscription in IPOs Oversubscription occurs when demand exceeds the shares available, while under-subscription indicates low investor interest.

Also Read: Grey Market Premium: What It Is and How It Affects IPO Listings

Conclusion

Understanding IPOs: A Path to Strategic Investment Decisions

Understanding what an IPO is is pivotal for companies and investors to achieve their financial goals. With the right insights and strategies, IPOs unlock significant opportunities.

Leverage Equentis RR to Maximize Your IPO Investment Success

Equentis RR’s expert analysis and resources empower investors to make informed decisions and capitalize on IPO opportunities.

Know more about:
IPOs | Current IPOs | Upcoming IPOs | Listed IPOs | Closed IPOs | IPO Performers

FAQs on IPOs

  1. What is the full form of IPO? 

    IPO stands for “Initial Public Offering,” when a private company first sells its shares to the public.

  2. How to check the allotment of IPO?

    To check IPO allotment status, visit the official website of the stock exchange or the IPO registrar. Enter application details like PAN and application number. Additionally, brokers’ online platforms and financial news websites often provide allotment updates after the listing.

  3.  How to apply for an IPO?

    To apply for an IPO, open a Demat account with a stockbroker. Choose an IPO and fill out the application form provided by the broker, specifying the bid quantity and price. Submit the form digitally or physically before the IPO closing date. Payment can be made through UPI or ASBA.

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ipos this week

The Dalaal Street Dozen: 12 Upcoming IPOs to Raise ₹4,600 crore this Week

This week, there is a lot of excitement in the stock market, with 12 companies preparing to launch their initial public offerings (IPOs). These companies are hoping to raise a total of ₹4,600 crore from investors. In addition to these IPOs, be ready for the listing of 8 IPOs too.

The Securities and Exchange Board of India (SEBI) has more than 65 IPO documents filed, of which the regulatory body has approved 25. The target of ₹4,600 crore is an increase from the ₹4,000 crore raised in the week prior. 

Launching the IPOs this week

The IPOs by the mainline and SME entities are all set to offer an opportunity for retail investors to be a part of the growth story of these companies, which have shown strong financial performance and have a competitive edge in their respective domains. 

Company NameOffer PriceOpening DateClosing DateIssue Size
Suraj Estate Developers₹340 to ₹36018-12-2320-12-23₹400Cr
Muthoot Microfinance₹277 to ₹29118-12-2320-12-23₹960Cr
Azad Engineering₹499 to ₹52420-12-2322-12-23₹740Cr
RBZ Jewellers₹95 to ₹10019-12-2321-12-23₹100Cr
Innova Captab₹426 to ₹44821-12-2326-12-23₹570Cr
Happy Forgings₹808 to ₹85019-12-2321-12-23₹1,008.59Cr
Credo Brands₹266 to ₹28019-12-2321-12-23₹549.78Cr
Supreme Power Equipment Ltd₹61 to ₹6521-12-2326-12-23₹46.67Cr
Indifra Ltd.₹6521-12-2326-12-23₹14.04Cr
Trident Techlabs Ltd₹33 to ₹3521-12-2326-12-23₹16.03Cr
Sameera Agro And Infra Limited₹18021-12-2327-12-23₹62.64Cr

IPOs Launching this week

1. Suraj Estate Developers 

Operating in the luxury and value luxury segments, the company (established in 1986) specializes in developing residential and commercial real estate in South-Central Mumbai. With a track record of completing 42 projects in the region, it has 13 ongoing projects and 16 upcoming ones.

Through the IPO, Suraj Estates Developers has the objective to utilize:  

  1. Repayment or prepayment of existing debts
  2. Acquisition of land or land development rights as part of the company’s expansion and growth strategy.
  3. General corporate needs aligned with ongoing operations and future plans
IPO DateDecember 18-20, 2023
Face Value₹5 per share
Price Band₹340 to ₹360
Lot Size41 shares
Total Issue Size₹400 crore from 1.11 crore shares
Issue TypeBook Built Issue IPO
Listing AtBSE, NSE

2. Muthoot Microfinance

Founded in 2011 as a subsidiary of the prominent financial conglomerate, the Muthoot Group, Muthoot Microfin Ltd is a leading microfinance institution (MFI). Catering to more than 5.5 million female entrepreneurs spanning 23 states and 5 union territories, it provides financial solutions such as microloans, group loans, and individual loans. 

The company booked 95% on the first day of the IPO opening, 18 December. It proposes to use the net proceeds to:

  1. Strengthen its capital base for future monetary requirements
  2. Enhance its brand image among customers 
  3. Create a public market in the country for equity shares.  
IPO DateDecember 18-20, 2023
Face Value₹10 per share
Price Band₹277 to ₹291 
Lot Size51 shares
Total Issue Size₹960 crore from 2.61 crore shares
Issue TypeBook Built Issue IPO
Listing AtBSE, NSE

3. Azad Engineering

The Hyderabad, Telangana, company distributes its mission-critical products to original equipment manufacturers (OEMs) in the aerospace, defense, energy, and oil and gas sectors. 

Its goals from the IPO capital involve utilizing the net proceeds for:

  1. Funding capital expenditure 
  2. General corporate requirements
  3. Settling some debts through repayment or prepayment 
IPO DateDecember 20-22 
Face Value₹2 per share
Price Band₹499 to ₹524 
Lot Size28 shares
Total Issue Size₹740 crore from 1.41 crore shares
Issue TypeBook Built Issue IPO
Listing AtBSE, NSE

Also Read: Top Semiconductor Stocks in India

4. Motison Jewellers

The jewelry company launched the IPO on 18 December to raise ₹151.09 crore through an entirely fresh issue of more than 2.74 crore equity shares at a price band of ₹52 to ₹55 per share. The IPO saw a subscription of 33.14 times on day one.

5. RBZ Jewellers

Since its incorporation in 2008, the Indian gold jewelry manufacturer has specialized in crafting antique designs, including jadau, meena, and kundan work. Selling to wholesale and retail, its clientele comprises esteemed family jewelers across 19 states and 72 cities in India. The jewelers also operate a retail showroom, Harit Zaveri, a prominent player in Ahmedabad.

IPO DateDecember 19-21 
Face Value₹10 per share
Price Band₹95 to ₹100 per share
Lot Size150 Shares
Total Issue Size₹100 crore through 1 crore shares
Issue TypeBook Built Issue IPO
Listing AtBSE, NSE

The gold jewelry manufacturer has already raised more than ₹21 crores from anchor investors. The IPO money raised will be used to fund the company’s working capital and general corporate purposes. 

6. Innova Captab 

Innova Captab Limited is a pharmaceutical company that offers contract development and manufacturing services to Indian pharmaceutical firms besides engaging with branded generics. After manufacturing and distributing 600+ generics in 2023, the company expanded its reach by exporting to 20 countries in FY2023.

The company plans to use the net proceeds from the fresh issue for:

1. Repayment or prepayment of outstanding company loans

2. Investment in its subsidiary, UML, for repayment or prepayment of loans

3. Meeting the working capital needs

4. General corporate objectives

IPO DateDecember 21–26 
Face Value₹10 per share
Price Band₹426 to ₹448 per share
Lot Size33 Shares
Total Issue Size₹570.00 Cr crore from 1.2 crore shares
Issue TypeBook Built Issue IPO
Listing AtBSE, NSE

7. Happy Forgings

The manufacturer of forged components for the automotive and other industries was founded in July 1979 and is involved in the manufacturing, design, and rigorous testing of crankshafts, front axle carriers, steering knuckles, pinion shafts, etc. 

The company intends to use the net proceeds obtained from the IPO for:

1. Acquisition of equipment, plant, and machinery

2. Settling all or some of its debts

3. General corporate requirements.

IPO DateDecember 19-21 
Face Value₹2 per share
Price Band₹808 to ₹850 per share
Lot Size17 Shares
Total Issue Size₹1008.59 crore from 1.18 crore shares
Issue TypeBook Built Issue IPO
Listing AtBSE, NSE

8. Credo Brands

Established in 1999, Credo Brands Marketing Limited introduced its flagship brand, “Mufti,” specializing in men’s casual clothing. From offering shirts, T-shirts, and trousers, the brand has expanded its product line to include sweatshirts, pants, chinos, jackets, etc. Operating 1,773 retail outlets across India, it has a presence in 582 cities.

With the IPO issues, the brand aims to 

  1. Realize the advantages of listing Equity Shares on Stock Exchanges 
  2. Amplify visibility and strengthen brand image
  3. Facilitate liquidity for Shareholders
  4. Establish a public market for equity shares in India
IPO DateDecember 19-21 
Face Value₹2 per share
Price Band₹266 to ₹280 per share
Lot Size53 Shares
Total Issue Size₹549.78 Cr crore from 1.96 crore shares
Issue TypeBook Built Issue IPO
Listing AtBSE, NSE

9. Supreme Power Equipment Ltd

Established in 1994, Supreme Power Equipment Limited specializes in producing, enhancing, and refurbishing diverse transformer types and has a manufacturing facility spread over 17,876 square meters in Thiruvallur, Chennai. 

The objectives of the issue include:

  1. Addressing capital expenditure needs
  2. Covering the company’s working capital requirements
  3. Attending to general corporate purposes
  4. Covering issue-related expenses
IPO DateDecember 21–26 
Face Value₹10 per share
Price Band₹61 to ₹65 per share
Lot Size2,000 Shares
Total Issue Size₹46.67 crore through 71.8 lakh shares
Issue TypeBook Built Issue IPO
Listing AtNSE, SME

10. Indifra Ltd

Established in 2009 and formerly called Starleads Consultants Private Limited, Indifra Limited specializes in infrastructure management contracting, gas pipeline installation, and distribution of electrical equipment. As of December 2023, the company is actively engaged in managing gas pipelines for Charotar Gas Sahakari Mandali Limited (CGSML) and has previously collaborated with Adani Gas Limited.

Its primary objectives through the IPO proposal are:

  1. Meeting working capital needs
  2. Addressing general corporate objectives and financing investments for acquisitions
  3. Covering expenses related to the public issue
IPO DateDecember 21–26 
Face Value₹10 per share
Price Band₹65 
Lot Size2,000 Shares
Total Issue Size₹14.04  crore through 21.49 lakh shares
Issue TypeFixed Price Issue IPO
Listing AtBSE, SME

11. Trident Techlabs Ltd

The provider of IT services and solutions to businesses was founded in 2000 and offers tech-based solutions to diverse industries such as aerospace, defense, automotive, telecommunications, semiconductor, and power distribution. The company operates across two sectors – engineering solutions and power system solutions. Trident Techlabs employs over 100 engineers and professionals.

 The company intends to use the net proceeds for:

1. Financing the Company’s working capital requirements.

2. Covering general corporate needs.

The agro-processing and infrastructure development company is seeking ₹62.64 crore through its IPO, with a price band of ₹180 per share and a total issue of 3.50 lakh equity shares. 

IPO DateDecember 21–26 
Face Value₹10 per share
Price Band₹33 to ₹35 per share
Lot Size4,000 Shares
Total Issue Size₹16.03 crore through 45.8 lakh shares
Issue TypeBook Built Issue IPO
Listing AtNSE, SME

12. Sameera Agro And Infra Limited

Established in 2002, Sameera Agro And Infra Limited, formerly Sameera Homes Private Limited, operates as an infrastructure development and construction firm. The company specializes in planning, developing, and building residential and commercial spaces, flyovers, subways, industrial parks, laying water pipelines, gas pipelines, and related projects. 

The company that entered into agricultural commodities such as pulses, cereals, and grains in 2021 proposes to use the net proceeds from the fresh issue for:

1. Completion of ongoing projects.

2. Construction of a new multiplex.

3. Fulfillment of existing working capital needs for the agro-business.

4. Covering general corporate expenses.

IPO DateDecember 21–27 
Face Value₹10 per share
Price Band₹180 per share
Lot Size800 Shares
Total Issue Size₹62.64 crore through 3.50 lakh shares
Issue TypeBook Built Issue IPO
Listing AtNSE SME

The 8 IPOs Listing this Week

As the above companies open their IPOs, there will be more action in the primary market as some giants await listing simultaneously. These are:

  1. DOM Pens
  2. INOX India
  3. SJ Logistics
  4. India Shelter Finance Corporation
  5. Siyaram Recycling Industries
  6. Shri OSFM E-mobility
  7. Presstonic Engineering 
  8. Benchmark Computer Solutions 

While these IPOs add to the stock market’s diversity, attracting interest from investors because of the companies’ and sectors’ growth prospects, investors should thoroughly research and vet their risk tolerance before investing in any IPO.

However, investors should also be cautious and do their due diligence in researching and vetting their risk tolerance before investing in any IPO.

QUICK LINKS:

CURRENT IPOS | LISTED IPOS | UPCOMING IPOS

Also Read:
How To Make Passive Income | AI Stocks
What is compounding | How to Invest in Shares Pre-IPO

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Muthoot Microfin Ltd. IPO

10 Things to Know about Microfinance Giant Muthoot Microfin IPO

The new week started on Monday, and with it came the announcement of the initial public offering (IPO) of Muthoot Microfin Ltd. This subsidiary of the Muthoot Group, a leader in India’s microfinance sector, will be open for subscription on December 18, 2023. If you’re an investor, here are the 10 key things you need to know.

Overview of Muthoot Microfin Ltd. IPO

It’s early days for Muthoot Microfin’s IPO; by 10:24 AM, subscriptions were at 0.06 times overall. Retail investors are more proactive, filling 0.15 times, while the institutional portion was 0.04 times. Investors can choose between 2.61 crore fresh shares worth ₹760 crore or tap into the ₹200 crore offer-for-sale. 

Background of Muthoot Microfin Ltd

Muthoot Microfin Ltd. is India’s leading microfinance institution (MFI), serving over 5.5 million women entrepreneurs across 23 states and 5 union territories. The company provides a range of financial products and services, including microloans, group loans, and individual loans, primarily focused on women borrowers in rural and semi-urban areas.

Muthoot Microfin Ltd. was founded in 2011 as a subsidiary of the Muthoot Group, a diversified financial conglomerate with over 90 years of experience in the financial services sector. The company leverages the extensive network and expertise of the Muthoot Group to reach underserved communities and provide them with access to financial services.

10 Key Muthoot Microfin Ltd. IPO Details to Know:

  1. Total Equity Shares and Fundraising: The IPO is expected to raise up to ₹960 crore through the issue, as the company allocated 97,93,812 shares. 
  2. Offer for Sale Structure: The offer for sale (OFS) by promoters and existing shareholders is up to ₹200 crore through 6,872,852 equity shares. Key participants include investor Greater Pacific Capital WIV (₹50 crore) and Muthoot family promoters (₹150 crore).
  3. Key Dates: The IPO subscription opens on 18 December 2023 and closes on 20 December 2023. The shares are expected to be listed on the BSE and NSE on 26 December 2023.
  4. Lot Size: The minimum lot size for participation in the IPO is 51 equity shares. Investors can place bids in multiples of 51 shares. The minimum investment amount for retail investors at the lower price band of ₹277 per share is ₹14,127, while at the upper price band, the minimum investment amount increases to ₹14,841.
  5. Price Band: The IPO price band is fixed at ₹277 to ₹291 per equity share. 
  6. Reserved Quota for Shareholders: The reservation of shares worth ₹10 crore for eligible employees at a discount of ₹14 per share. The net offer will be allocated with 50% reserved for qualified institutional bidders (QIBs), 35% for retail investors, and 15% for non-institutional investors.
  7. Gray Market Premium: Market observers state that the IPO is currently trading at a premium of ₹82 per share in the gray market.
  8. Amount from anchor investors: The company mobilized ₹285 crore from anchor investors. 
  9. Financial Performance and Growth Metrics: During the fiscal year that ended on 31 March 2023, Muthoot Microfin experienced a substantial 72% increase in revenue, registering ₹1,446.34 crore. The company’s profit after tax (PAT) witnessed a 245% growth to ₹163.89 crore.
  10. Book-Running and Lead Managers: While Axis Capital, ICICI Securities, SBI Capital Markets, and JM Financial serve as the book-running lead managers, Kfin Technologies is the designated registrar for Muthoot MicroFin Ltd. 

SWOT Analysis of Muthoot Microfin Ltd

STRENGTHSWEAKNESSES
Strong brand recognition and reputation of the Muthoot Group. Extensive branch network and customer reach. Experienced management team with a deep understanding of the microfinance sector. Focus on women borrowers and financial inclusion.Dependence on the rural and semi-urban market, which is vulnerable to economic downturns.High concentration of loans in the southern states of India.Susceptibility to interest rate fluctuations.
OPPORTUNITIESTHREATS
Growing demand for microfinance in India due to increasing financial inclusion and government initiatives.Diversification into new product categories and geographies.Adoption of technology to improve efficiency and reach.Increasing competition from other MFIs and banks.Regulatory changes in the microfinance sector.Economic slowdown impacting borrowers’ repayment capacity.

As the IPO for the Muthoot Microfin Ltd. IPO opens on 18 December, these are the top 10 things to look at for investors before making any decision. 

Know more about:
IPOs | Current IPOs | Upcoming IPOs | Listed IPOs | Closed IPOs | IPO Performers

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blogs13 what happening with harsha engineers after the ipo

4 Key Factors Behind Harsha Engineers Share Price Struggles After Successful IPO

In engineering, ball bearings find applications in various industries and machinery where rotational movement is essential. The bearing cage is the component that houses the ball bearings, which helps achieve low-friction, smooth, and high-precision rotational movement. As simple as it may appear, it is the crucial component of any machinery with rotational movement.

Harsha Engineers, a listed company, is the leading manufacturer of precision bearing cages in the world, with a market share of approximately 5-6% in the organized segment of global brass, steel, and polyamide bearing cages in terms of revenue.

Since the IPO launch in September 2022, the company has witnessed higher investors’ interest, and Harsha Engineers share price has given superior returns to its early investors.

In this article, we will check the factors affecting Harsha Engineers share price growth, but first, a quick overview of the company’s operations and finances. 

Brief Overview of Harsha Engineers

Harsha Engineers was incorporated in 1986 and is the largest manufacturer of bearing cages in the organized market in India in terms of capacity and operations. India’s largest precision bearing cage manufacturer has a 50% and 6% market share globally.

The company has four manufacturing facilities in Gujarat: Changodar and Moraiya in Gujarat, Changshu in China via a subsidiary, and Ghimbav Brasov in Romania through a step-down subsidiary. It supplies products to over 25 countries on five continents, including the top six bearing manufacturers in the world. 

Over the years, Harsha Engineers has developed expertise in tooling, design development, and automation, helping offer a diversified suite of precision engineering products. After a successful IPO, the company went public on September 26, 2022.

Business Overview of Harsha Engineers

Harsha Engineers is primarily engaged in the business of manufacturing high-precision bearing cages and solar.

The company’s solar division was previously known as Harsha Abakus, a global entity founded in 2013. This subsidiary provides comprehensive turnkey solutions for all solar PV requirements and executed work on 500 MW+ solar installation projects.

According to AS-108, the company has two reportable business segments:

  • Engineering & Others
  • Solar-EPC and O&M

Financials

Revenue

In FY23, the company’s revenue from operations reached ₹1,364.02 crores, an increase of 3.22% compared to ₹1,321.48 crores in FY22. In H1FY24, the revenue from operations was ₹687.45 crores, compared to ₹719.6 crores reported in H1FY23, a fall of 4.67%.

image 2
Source: Harsha Engineers

Segment-wise Revenue

 FY22 (in ₹ crores)FY23 (in ₹ crores)H1FY23 (in ₹ crores)H1FY24 (in ₹ crores)
Engineering & Others    1,238.531,298.66676.70628.58
Solar-EPC and O&M82.9565.3642.95  58.87
Source: Harsha Engineers

EBITDA

In FY23, the company reported an EBITDA of ₹219.08 crores from ₹186.55 crores in FY22. The EBITDA margin was 16.06% in FY23 and 14.12% in FY22. And, for the six-month period that ended on 30th September 2023, the company’s EBITDA came in at ₹107.94 crores compared to ₹87.71 crores during the same period the previous year.

image 3

Net Profit

In FY22, Harsha Engineers reported a net profit of ₹123.28 crores, a 34% increase compared to the previous fiscal from ₹91.95 crores. In H1FY24, the company’s net profit came in at ₹44.97 crores, compared to ₹58.92 crores reported in H1FY23.

image 4

Harsha Engineers IPO

Harsha Engineers IPO was launched on September 14th, 2022, and ended on September 16th, 2022. During the period, the IPO was oversubscribed by a whopping 74.70 times.

The IPO size was ₹755 crores, comprising a fresh issue of ₹455 crores and an offer for sale of ₹300 crores. The IPO price band was set at ₹314 to ₹330 per share. Harsha Engineers IPO allotment was made at a higher price band, and the stock was listed at ₹450 on NSE, with a listing gain of 36.36%. The stock ended its first day of trading almost 10% higher at ₹485 per share.

1-year Performance

image 5

Harsha Engineers share price has failed to provide positive returns to investors since its listing despite a stellar debut in the market. The stock fell to a low of ₹309 and has yet to rise above its listing price.

The probable factors that are affecting the Harsha Engineers share price growth are as follows:

Decline in Operational Efficiency

In the first six months of FY24, the company experienced a notable decrease in operational efficiency, with EBITDA margin falling from 15% in H1FY23 to 12.76% in H1FY24. The Earnings per Share during the same period fell from ₹7.55 to ₹4.94.

The Return on Average Equity (ROAE) went from 15.29% in H1FY23 to 8.23% in H1FY24, impacting investors’ sentiment and the company’s market valuation.

A Slowdown in Key Markets

Romania and China are the two most important markets for the company, which is experiencing double-digit degrowth. In addition, the company’s growth strategy is being impacted by a softening global wind market and steep inflation in Europe. The company’s management has expressed concern about improving operational and profit margins in Romania and China.

Degrowth in Engineering & Others Segment in India

The company’s stand-alone engineering segment has witnessed a revenue degrowth of 4-5% in Q2FY24 as exports to Europe and China were impacted.

Harsha Engineers share price has been impacted by the market cycle’s contraction, which has affected its profitability and operational metrics in the short term. However, the bearing cage market is expanding due to increased usage in key fast-growing end-user industries. It is expected to grow at a CAGR of 6.4% to $8.5 billion by 2029.

Bearing companies globally are steadily shifting towards outsourcing the production of critical components to dependable suppliers. With its cost-effective solutions and global presence, Harsha Engineers enjoys a long-term advantage in this evolving landscape.

Know more about:
IPOs | Current IPOs | Upcoming IPOs | Listed IPOs | Closed IPOs | IPO Performers

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the Performance of the intermediary or provide any assurance of returns to investors.

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upcoming ipos in november

Upcoming IPOs in November 2023

Introduction

It’s November, which is time for Upcoming IPOs in November 2023. In the financial world, Initial Public Offerings (IPOs) are like grand openings for companies, inviting the public to invest in their future. It’s when a private company takes its first steps into the public market by offering shares to the general populace. But what’s the nitty-gritty of this process? Let’s break it down.

What’s an IPO?

An IPO essentially marks the transition of a private company into a publicly traded entity. This means that the company’s ownership shifts from a select group of private investors to the wider public. It’s a significant financial event for both the company and potential investors.

Fresh Capital or Existing Shares?

When a company goes public, it can either issue new shares to raise capital or let existing shareholders sell their shares, a process known as an Offer for Sale (OFS), without generating fresh capital.

We have three Upcoming IPOs in November 2023. Let’s sneak peek into the IPOs set to make waves in November 2023.

Upcoming IPOs in November 2023

Company NameIssue Size (in ₹ Cr)IPO Date
Cello World Limited IPO1,900.00October 30 to November 1, 2023
Honasa Consumer Limited1,701.00October 31 to November 2, 2023
ESAF Small Finance Bank463November 3 to November 7, 2023

1. Cello World Limited

Another upcoming IPO in November 2023 is Cello World. Cello World Limited is a prominent name in India’s consumer ware industry, with a footprint extending to consumer houseware, writing instruments, stationery, moulded furniture, and related products.

As of March 31, 2023, it operates 13 manufacturing facilities across 5 locations in India. The company is even in the process of setting up a glassware manufacturing facility in Rajasthan. To learn more, check the DRHP.

Details of Cello World Limited’s IPO:

  • Type: 100% Offer for Sale (OFS)
  • Number of Shares: 2,93,20,987
  • Share Price Range: ₹617 to ₹648
  • Aggregated Amount: ₹1,900.00 Cr
  • Minimum Investment (Retail): ₹14,904
  • Listing Date: November 09, 2023
  • Exchanges: BSE and NSE

2. Honasa Consumer Limited(Mamaearth)

Honasa Consumer Limited wears the crown as India’s largest digital-first Beauty and Personal Care (BPC) company by revenue for FY 2023. What sets it apart is its unwavering commitment to providing toxin-free beauty products, all crafted from natural ingredients. Its marquee brand, Mamaearth, has become synonymous with natural, safe-to-use products. To get a better idea, check the DRHP and read our in-depth article on Mamaearth IPO.

Details of Honasa Consumer Limited’s IPO:

  • Type: Fresh Issue and Offer for Sale (OFS)
  • Fresh Capital Raised: ₹365.00 Cr
  • OFS Shares: 4,12,48,162
  • Share Price Range: ₹308 to ₹324
  • Aggregated Amount: ₹1,701.00 Cr
  • Minimum Investment (Retail): ₹14,904
  • Listing Date: November 10, 2023
  • Exchanges: BSE and NSE

3. ESAF Small Finance Bank

ESAF Small Finance Bank Limited is all set to launch its Initial Public Offering (IPO) with utmost confidence. Founded in 1992, ESAF is a renowned Small Finance Bank that primarily focuses on providing loans to customers residing in rural and semi-urban areas.

The Bank offers a wide range of products such as Micro Loans, Retail Loans, MSME Loans, Loans to Financial Institutions, and Agricultural Loans. As of March 2023, the Bank has a widespread network of 700 outlets, 743 customer service centers, 20 business correspondents, and 481 business facilitators. The Bank also has 581 ATMs located across 21 states in India. Read the DRHP to learn more.

Details of ESAF Small Finance Bank

  • Issue Size: Rs 463.00 crores
  • Issue: Fresh Issue: Rs 390.70 crores and Offer for Sale: Rs 72.30 crores,
  • Subscription Period: November 3 to November 7, 2023
  • Allotment Date: Friday, November 10, 2023
  • Listing Date: Thursday, November 16, 2023
  • Stock Exchanges: BSE, NSE
  • Price Band: Yet to be announced

IPOs are akin to a mutually beneficial dance. Companies gain capital by offering shares, free from interest obligations. Investors, in turn, can buy in at a potentially lower price, reaping returns in the long run. Additionally, IPOs can lead to listing gains if the company debuts on a high note. However, you must always do your due diligence before investing in any IPO.

Know more about:
IPOs | Current IPOs | Upcoming IPOs | Listed IPOs | Closed IPOs | IPO Performers

FAQs

  1. How does an IPO benefit a company?

    An IPO allows a company to raise capital by issuing shares to the public, enabling growth and expansion.

  2. Can individual investors participate in an IPO?

    Yes, individual investors can participate in an IPO by purchasing shares through the designated process.

  3. What is an Offer for Sale (OFS) in an IPO?

    An OFS allows existing shareholders to sell their shares to the public without generating fresh capital for the company.

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Frequently asked questions

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What is an Investment Advisory Firm?

An investment advisory firm is a company that helps investors make decisions about buying and selling securities (like stocks) in exchange for a fee. They can advise clients directly or provide advisory reports and other publications about specific securities, such as high growth stock recommendations. Some firms use both methods, like Research & Ranking, India’s leading stock advisory company, specializing in smart investments and long-term stocks since 2015.

An investment advisory firm is a company that helps investors make decisions about buying and selling securities (like stocks) in exchange for a fee. They can advise clients directly or provide advisory reports and other publications about specific securities, such as high growth stock recommendations. Some firms use both methods, like Research & Ranking, India’s leading stock advisory company, specializing in smart investments and long-term stocks since 2015.

An investment advisory firm is a company that helps investors make decisions about buying and selling securities (like stocks) in exchange for a fee. They can advise clients directly or provide advisory reports and other publications about specific securities, such as high growth stock recommendations. Some firms use both methods, like Research & Ranking, India’s leading stock advisory company, specializing in smart investments and long-term stocks since 2015.

An investment advisory firm is a company that helps investors make decisions about buying and selling securities (like stocks) in exchange for a fee. They can advise clients directly or provide advisory reports and other publications about specific securities, such as high growth stock recommendations. Some firms use both methods, like Research & Ranking, India’s leading stock advisory company, specializing in smart investments and long-term stocks since 2015.