Main board IPO Guidance & Advice at a glance

October 16, 2024

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Hyundai Motor India: A Leading Player in the Indian Automobile Sector

Hyundai Motor India stands out as a premier brand in the Indian automotive landscape, renowned for its innovative designs and advanced technology. The company’s vehicles have garnered significant popularity among car buyers, thanks to their unique features and high-quality performance.

However, it’s important to note that the shares in Hyundai’s IPO are being offered at a premium valuation compared to its peer companies. When evaluating Hyundai alongside industry leaders such as Maruti, Tata Motors, and Mahindra & Mahindra, it becomes clear that Hyundai occupies a distinct market position. Unlike Tata Motors, which focuses heavily on commercial vehicles, or Mahindra & Mahindra, Hyundai’s offerings cater primarily to personal and passenger vehicles, further enhancing its unique standing in the market.

The substantial size of the IPO also suggests a high likelihood of share allotment for investors. While we anticipate a nominal listing premium, there is also a possibility of a discount listing due to the overall market conditions and investor sentiment.

In summary, Hyundai Motor India’s strong brand reputation, innovative product portfolio, and unique market position make it a noteworthy player in the Indian automobile sector, despite the high valuation of its IPO compared to peers. Apply as long term investment. Small listing gains are expected.
IPO opens on 15 October 2024, Closes on 17 October 2024
Price Band Rs. 1865-1960, lot of 7 shares

Premier Energies: Caution Advised, May Avoid

In the face of a rapidly evolving global solar equipment market, the high valuation of Premier Energies raises questions about its prudence. Currently, the Nifty 50 index, reflecting major blue-chip companies, trades at 23 times FY25 earnings estimates.

Although Premier Energies operates in the thriving solar industry, the global market is burdened with excess capacity and declining solar module prices. While the Indian sector benefits from government tariffs and procurement policies favoring domestic manufacturers, these protections link the company’s prospects closely to governmental policies and trade relations. Additionally, Premier Energies relies heavily on imported raw materials, especially from China.

Historically, solar equipment manufacturers have been vulnerable to swift technological advancements. China, a dominant force in the sector, benefits from cost advantages and substantial investments, making it challenging for others to compete.

Despite Premier Energies’ improved financial performance in FY24, investors should remain cautious. Profit margins are under pressure from increasing competition and ongoing price declines.

Akum Drugs IPO Review

Issue price Rs. 679, GMP on July 30, 2024, Rs.205
Established in 2004, Akum Drugs is a pharmaceutical contract development and manufacturing organization (“CDMO”) offering a comprehensive range of pharmaceutical products and services in India and overseas. The company is the largest India-focused CDMO in terms of revenue, production capacity and clients served during the Financial Year 2023. In addition to its core CDMO business, it actively engages in marketing its own branded formulations in India and across global markets and has established a domestic and international presence through its Subsidiaries.
Size: The size of the IPO is only 27368151 shares and hence oversubscription will smooth. Retail portion is of 2712424 shares/only 10% of the IPO and hence huge oversubscription in Retail and HNI categories is expected.
Financials: At a first glance, you may find volatile trend in the net profits during last 3 years. However, if we look deep in the figures, excluding exceptional items, the company has strong growth in the total income and net profits. Based on the EPS of Rs. 24.56 excluding exceptional item, the shares are offered at very reasonable valuation, and we strongly suggest applying this IPO. We strongly recommend these shares as medium term investment which can provide huge returns in next 9 months.
+ from Fundamental Angle= Must Apply
+ from Grey Market Angle= Apply

Sanstar IPO Review

Issue price Rs. 95, GMP on July 19, 2024 Rs. 39
Sanstar is one of the major manufacturers of plant-based speciality products and ingredient solutions in India for food, animal nutrition and other industrial applications. Its products include liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starches, modified maize starches and co-products like germs, gluten, fiber and enriched protein, amongst others.
Sanstar’s revenue from operations has grown at a CAGR of 45% from Rs.5,044.02 Mn in FY22 to Rs.10,672.71 Mn in FY24, driven by both domestic and international market expansion, with exports now reaching 49 countries.
Sanstar Limited is poised for significant growth, leveraging its aggressive capacity expansion, robust export strategies, and diversification into higher-margin derivative segments.
With an additional 1,000 tons per day capacity at its Dhule Facility expected to commence by Fiscal 2026, the company aims to meet the increasing global demand for its maize starch, liquid glucose, dextrose monohydrate, and dextrose anhydrous products. The company is also focused on reducing its debt using IPO proceeds, which will lower the interest burden and enhance profitability.
The commissioning of captive solar and biogas power plants is expected to reduce power costs significantly, further boosting profit growth. Adhering to high standards of quality and sustainability, Sanstar’s strategic focus on cost management, operational efficiency in the backdrop of substantial topline growth is expected to drive sustained profitability and market share expansion, making it a formidable player in the industry.
Size: The net size of the IPO is very small and retail portion is only Rs. 178.55 crore and HNI portion is only Rs. 76.52 crore. So huge over subscription is expected.
Review: We have assigned a ‘SUBSCRIBE’ rating for the IPO of Sanstar Ltd as the P/E ratio of 25.9x on FY24 EPS appears lucrative in light of its strong growth potential.
+ from Fundamental Angle= Apply
+ from Grey Market Angle= Apply

Emcure Pharmaceuticals IPO Review

Issue price Rs. 1008, GMP on July 2, 2024 @ 8.00 Rs. 295
Emcure Pharmaceuticals is one of the leading Indian pharmaceutical companies engaged in developing, manufacturing and globally marketing a broad range of pharmaceutical products across several major therapeutic areas. It is a R&D driven company with a differentiated product portfolio that includes orals, injectables and biotherapeutics, which has enabled it to reach a range of target markets across over 70 countries, with a strong presence in India, Europe and Canada.
Size: The size of the IPO is Rs. 1952.03 crore and considering the market euphoria, the size is not very large. The HNI portion is Rs. 292.80 crore and retail portion is Rs. 683.21 crore. The IPO is expected to receive huge over subscription.
Financials: The company has shown rangebound trend in its topline and bottomline during last 3 years. According to the explantion provided by the management, the company has incurred huge promotional/ sales and marketing expenses during last year and the fruits of the same will be availed in the year 2024-25. In spite of low profits, the shares are offered at PE Multiple of 36.60 and compared to other leading pharma companies, the shares are offered at not so high valuation. Looking to its leadership position in some of the product categories and very sound balancesheet, one must apply and it offers good for strong listing gains. Because of the Shark Tank presence and goodwill of one of the promoters, huge over subscription is possible.
+ from Fundamental Angle= Apply
+ from Grey Market Angle= Apply

Bansal Wire Industries IPO Review:

Issue price Rs. 265, GMP on July 2, 2024 @ 8.00 Rs. 65
Bansal Wire Industries is the largest stainless steel wire manufacturing company and the second largest steel wire manufacturing company by volume in India with a production of 72,176 MTPA and 206,466 MTPA, respectively, in Fiscal 2023, representing 20% and approximately 4% market share, respectively.
Financial Analysis: The company has divided its Rs. 10 face value shares in to 2 shares of the face value Rs. 5 each. Subsequently on 1 December 2023, after the end of the financial year 2022-23, 109246620 shares have been issued as bonus shares and accordingly the paid-up capital prior to the IPO has increased to 637272950 shares. The EPS for the year 2022-23 and earlier period have to be reworked on the basis of enlarged equity base. Considering the leadership position in steel wire market and huge potential of its new plant at Dadri, the IPO offers strong potential for listing gains. However from medium to long term angle, this investment can bring bumper returns.
+ from Fundamental Angle= Apply
+ from Grey Market Angle= Apply

Vraj Iron IPO Guidance* by Paresh Gordhandas, CA & Research Analyst.
Price Rs 207, Lot 72 Shares, Net Size Rs 171 Crore
LM: Aryaman Financial Services ltd
Open 26 June Close 28 June BoA 1 July, Listing 3 July
The Company is engaged in manufacturing of Sponge Iron, M.S. Billets, and TMT bars under the brand Vraj.
It currently operates through two manufacturing plants which are located at Raipur and Bilaspur in
Chhattisgarh spread across 52.93 acres. As of March 31, 2023, the aggregate installed capacity of its
manufacturing plants was 2,31,600 tons per annum (“TPA”) (comprising of intermediate and final products).
Size: The size of the IPO is only Rs. 171 crore with retail portion only of 59.85 crore. With 40157 applications, retail portion will get one time subscribed. There are all chances of huge oversubscription in Retail and NII categories.
Financials: The company has shown EPS of Rs. 21.84 for the year 2022-23, However the bonus issue was in the ratio 4:1 (For every 1 (one) Equity Share held by its the then shareholders 4 (four) Equity Shares were allotted to them) on September 29, 2023.So, we have to rework the EPS for the year and also book value as on 31.03.2023. Because of the bonus issue, the equity share capital has increased to 24721750 from 4944350 shares as per balance sheet of 31.03.2023 and the EPS get diluted to Rs.21.84. The shares are offered at PE multiple of 9.47. So there is some room for listing gains. Chances of allotment are very low and yet you may try and apply.
Strategy seen in the grey market: At present the premium being quoted in the grey market is very insignificant and the premium market-experts expect the premium to show rising trend once the IPO opens for subscription.

Stanley Lifestyles IPO Guidance
Price Rs 369, Lot 40 Shares, Net Size Rs.375.91 Crore
Open 21 June Close 25 June BoA 26 June, Listing 28 June
Stanley Lifestyles is India’s largest super-premium and luxury furniture brand with a market share of 5.61% in terms of revenue in Fiscal 2022. It is also among the few home-grown super-premium and luxury consumer brands in India operating at scale in terms of manufacturing as well as retail operations. Further, it is the fourth largest player in the home furniture segment in India in terms of revenue in Fiscal 2022.
Size: The size of the IPO, Rs. 537 crore is not very large and the retail portion is Rs. 187 crore. With 127343 applications, retail portion can get one time subscribed. So oversubscription is not an issue.
Financials: Barring 2020-21, which was Covid affected year, the company has earned impressive profits. The shares at upper price band are offered at PE multiple of 57.92, which leaves very small room for listing gains. The company has severe competition from furniture imported from China and Vietnam. At the time same the sharp growth in the residential real-estate, the demand for quality furniture is increasing. Being small IPO, the chances of allotment are low. Apply with the expectations of about 30 to 40% listing gains.

Dee Development Engineers IPO Guidance
Price Rs 203, Lot 73 Shares, Net Size Rs.407.06 Crore
Open 19 June Close 21 June BoA 24 June, Listing 26 June
Dee Development Engineers IPO Guidance
Dee Development Engineers is an engineering company providing specialized process piping solutions for industries such as oil and gas, power (including nuclear), chemicals and other process industries through engineering, procurement and manufacturing. It has manufacturing experience of over three and a half decades and have been able to leverage its brand, strategically located manufacturing facilities and engineering capabilities to successfully expand its business.
The Company currently is ranked as one of the leading process pipe solution providers in the world, in terms of technical capability to address complex process piping requirement arising from multiple industrial segments.
Size: The size of this mainboard IPO is only Rs. 418.01 Crore and retail portion is only Rs. 146.30 crore and HNI portion is Rs. 62.70 crore. So oversubscription is not an issue.
Financial Analysis: The business of the company cannot be compared with that of ISGES Heavy Engineers, Apparently, the shares of this company are offered at very high valuations, however the business has high entry barriers and competition is expected to be very low in near future. The company has shown steady growth in the topline and the bottom-line. Looking to the trend, the performance for the year 2023-24 which will be announced after the IPO, is expected to be excellent. Huge capital-investments are coming in for Refineries, petrochemical plants, power plants and it will create huge market for this company.
Post Listing: On the basis of estimated profits for the year 2023-24, we consider the valuation/offer price at upper price band to be somewhat costly, however we expect significant gains six months after the listing is done.
Listing Gains? So far as listing gains are concerned, small size of the IPO, huge oversubscription and interest cost may provide about 25 to 30% listing gains. At present, you may see some premium quotes in the grey market. The business is excellent with strong growth potential, yet we consider the offer price, too costly and hence we expect small listing gains (may be around 20 to 30% of the offer price). Must Apply for listing gains as well as long term investment.

Akme Fintrade IPO Guidance
Price Rs 120, Lot 125 Shares, Net Size Rs.375,91 Crore
Open 19 June Close 21 June BoA 24 June, Listing 26 June
Akme Fintrade (India) is a NBFC incorporated in the year 1996 registered with the Reserve
Bank of India as a Non-systemically important non-deposit taking company with over two decades of lending experience in rural and semi-urban geographies in India. It is primarily engaged in rural and semi-urban centric lending solutions to look after the needs and aspirations of rural and semi-urban populace. Its portfolio includes Vehicle Finance and Business Finance Products to small business owners.
Size: The size of this mainboard IPO is only Rs. 132 Crore and retail portion is only 3657500 shares and HNI portion is only 1567500 shares. So huge oversubscription is expected.
Financial Analysis: The company operates in finance business and it has become highly competitive. The shares are offered at normal valuation and leaves small room for listing gains. Allotment will be tough. So you may take chance and apply.

Le Travenues Technology IPO Guidance
Price Rs 93, Lot 161 Shares, Net Size Rs.740.10 Crore
Open 10 June Close 12 June BoA 13 June, Listing 19 June
Le Travenues Technology is a technology company focused on empowering Indian travelers to plan, book and manage their trips across rail, air, buses and hotels. It assists travelers in making smarter travel decisions by leveraging artificial intelligence, machine learning and data science led innovations on its OTA platforms, comprising its websites and mobile applications. Its websites and app have been very user friendly and takes care of minute requirements of the travellers.
Le Travenues Technology is the largest Indian OTA in the online train bookings segment and its train-centric mobile applications, ixigo trains and ConfirmTkt, were collectively the leading B2C distribution platforms for IRCTC with 51% market share.
It has deep penetration in the ‘next billion user’ market, which comprises users predominantly from Tier-II and Tier-III cities and rural India and it is expected that 20% of ‘next billion users’ will come from Tier I cities.So the business has been very strong, growing and has huge potential in the coming decade.
Size: The size of the IPO is very small. Only Rs. 111 crore shares are available for HNIs and Rs. 74 crore shares are for NIIs. So huge oversubscription is possible.
Financials and Guidance: The company showed turnaround trend during 2022-23 with EPS of 53 paisa and during9 months of 2023-24, it has EPS of Rs. 1.74. Let’s hope such turnaround results are not IPO purposes, and the company maintains such profitability even during 2024-25. Two other online travel company shares ( Ease My Trip and Yatra online) lack investor fancy. and yet we expect this scrip to perform better and recommend it for subscription. Apply for listing gains as well as for long term investment.

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