April 22, 2024
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Main board IPO Guidance Review Advice at a Glance
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JNK India IPO Guidance
JNK India is one of the leading Heating Equipment companies in India in terms of new order booking between Fiscal 2021 to Fiscal 2023 and has capabilities in thermal designing, engineering, manufacturing, supplying, installing and commissioning process fired heaters, reformers and cracking furnaces. It is one of the well-recognized process fired heater companies in India, having a market share of approximately 27% in the Indian Heating Equipment market, in terms of new order booking in Fiscal 2023.
Size: The gross size of the IPO is Rs. 649.47 Crore whereas the size net of anchor portion is very small. Retail portion is only Rs. 227.31 crore and HNI portion is only Rs.97.42 crores. So oversubscription is not an issue. However the grey market at present is focused on Vodafone Idea FPO, so huge oversubscription may not be seen for this IPO.
Financials: The company has shown steady rise in the topline and the bottomline. The market at present is strong and expanding and we expect that the company will be able to maintain its profits of 2022-24, in the coming years. The shares are offered at reasonable valution. Listing gains are expected. Apply.
Vodafone Idea FPO Guidance* by Paresh Gordhandas, CA & Research Analyst.
Price Rs 11, Lot 1298 Sh, Net Size Rs.18000 Cr.
Op 18 April Cl 22 April BoA 23 April, Listing 25 April
Premium: Rs. 1.70 (CMP Rs.12.95)
Vodafone Idea is the third largest telecommunications service provider in India based on subscriber base. According to the GSMA Intelligence Database, it is the sixth largest cellular operator globally in terms of number of subscribers in a single country of operations.
Size: This being a mainboard FPO, the issue size of Rs. 18000 Cr is very large. HNI portion is Rs. 2700 crore and retail portion is Rs. 6300 crores, which is also very high. With 4412383 applications, retail portion can get one time subscribed. So huge oversubscription is not at all expected.
Financials: During last 3 years, the company has shown huge losses. As of 31st December 2023, the company had total borrowings of Rs. 203426 crores, out of which small amount (Rs.2175 crore will be paid from the proceeds of this FPO.) In India, the telecom market has low competition level. If the three major players increase the mobile terrif with mutual understanding, even this company can turn corners. Compared to the current market price of Rs. 12.95(closing price of 12th April 2024), one may get small returns on listing. Chances of allotment are very high. Do understand, you may or may not get listing gains. Apply only with long term angle.
Strategy seen in the grey market: As seen in the market today, the investors sell their application at subject to rates and then apply. Many of the investors sell their shares at premium in the grey market and plan to make applications.
Bharti Hexacom IPO Guidance* by Paresh Gordhandas, CA & Research Analyst.
(IPO opens on 3 April, Closes on 5 April)
Bharti Hexacom is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India, which comprises the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. It offers its services under the brand ‘Airtel’. It was at number one position in the North East circle during the nine months ended December 31, 2023 and Fiscals 2023 and 2022. In the Rajasthan circle, the market share gap between it and the market leader has narrowed between Fiscal 2021 and the nine months ended December 31, 2023 and it stood at the close second position during the nine months ended December 31, 2023.
Size: This being a mainboard IPO, the size Rs. 4275 Cr is somewhat large. At present, so many SME IPOs have entered the market and year-end is nearby, so huge oversubscription may not be possible. However in this IPO, 75% of the shares are reserved for the QIBs, and only 15% shares are available for NIIs, so overubscription is not at all difficult.
Financials: The company has shown volatility in its bottomline. However, in India, the telecom market has low competition level, hence good profitability is expected to continue. The shares are offered at reasonable valuation, compared to the peer companies. Apply only with long term angle. You may or may not get listing gains.
SRM Contractors IPO Guidance* by Paresh Gordhandas, CA & Research Analyst.
(IPO opens on 26 March, Closes on 28 March)
SRM Contractors is an engineering construction and development company engaged primarily in the construction of roads (including bridges), tunnels, slope stabilisation works and other miscellaneous civil construction activities in the Union Territories of Jammu & Kashmir and Ladakh. It undertakes construction works both as an EPC contractor and on an item rate basis for infrastructure projects. The Company also undertakes sub-contracting assignments of infrastructure construction projects. It has a track record of successful execution of road, tunnel and slope stabilization projects in the difficult terrain of union territories of Jammu & Kashmir and Ladakh
Size: The size of the IPO is just Rs. 130.20 Cr and retail portion is just Rs. 45.57 Cr and HNI portion is Rs. 19.53 Cr. So, oversubscription will be quite smooth.
Financials: The shares are offered at very reasonable valuation. Chances of allotment are tough, yet if you get allotment, the listing gains are expected. Apply.
Popular Vehicles IPO Guidance
(IPO opens on 12 March, Closes on 14 March)
Popular Vehicles is a diversified automobile dealership in India in terms of revenue as of Fiscal 2023, having a fully integrated business model. It caters to the complete life cycle of vehicle ownership, right from the sale of new vehicles, servicing and repairing vehicles, distributing spare parts and accessories, to facilitating sale and exchange of pre-owned vehicles, operating driving schools and facilitating the sale of third-party financial and insurance products. The company categorizes its automobile dealership business into three key segments, namely, (a)passenger vehicles including luxury vehicles, (b) commercial vehicles and (c) electric two-wheeler and three-wheeler vehicles, which contributed to its revenue from operations aggregating to Rs.16,918.51million, Rs.9,616.33 million and Rs.450.41 million, respectively, during the six months period ended September 30, 2023.
It operates (a) passenger vehicle dealerships covering economy, premium and luxury vehicles across its dealerships for the following OEMs: (i) Maruti Suzuki India Limited (“Maruti Suzuki”) for both Arena and Nexa, through our Company,(ii) Honda Cars India Limited (“Honda”) through its Subsidiary, VMPL, and (iii) Jaguar Land Rover India Limited (“JLR”) through its Subsidiary, PAWL; (b) commercial vehicle dealerships of (i) Tata Motors Limited (“Tata Motors (Commercial)”), through its Subsidiary, PMMIL and (ii) Daimler India Commercial Vehicles Private Limited (“Bharat Benz”), through its Subsidiary, PMPL; and (c) electric three-wheeler vehicle dealership of Piaggio Vehicles Private Limited, including commercial and cargo vehicles (“Piaggio”), through its Subsidiary, KGPL and electric two-wheeler vehicle dealership of Ather Energy Private Limited (“Ather”), through its Subsidiary.
As of December 31, 2023, it operated through its network of 61 showrooms, 133 sales outlets and booking offices, 32 pre-owned vehicle showrooms and outlets, 139 authorised service centres, 43 retail outlets, and 24 warehouses located across 14 districts of Kerala, 8 districts in Karnataka, 12 districts in Tamil Nadu and 9 districts in Maharashtra. While its sales outlets and booking offices complement its sales through its showrooms, our retail outlets facilitate sale and distribution of spare parts and accessories.
Size: The size of the IPO net of Anchor portion is just Rs. 425.25 Cr. HNI portion is Rs. 92.08 Cr and Retail portion is only Rs. 214.86 Cr. So the IPO will get oversubscribed very smoothly.
Financials and Guidance: The company has strong financials and balancesheet. Very strong debt equity ratio. Important aspect is its growth potential. Compared to USA and other developed countries, in India, vehicle population per 1000 persons is very low and the business has strong growth potential in the next 10 years. The shares are offered at very attractive valuation and there is room for listing gains. The shares are expected to give strong returns in the next 9 months post-listing. Apply.
Krystal Integrated Services IPO Guidance
(IPO opens on 14 March, Closes on 18 March)
Krystal Integrated Services is one of India’s leading integrated facilities management services companies, with a focus on healthcare, education, public administration (state government entities, municipal bodies and other government offices), airports, railways and metro infrastructure, and retail sectors.
or Fiscals 2021, 2022 and 2023, its revenue from government contracts amounted to Rs.3,271.12 million, Rs.4,050.85 million and Rs.5,212.75 million, respectively, aggregating to 69.41%, 73.30% and 73.66% of our revenue from operations. It provide services to key government customers in the healthcare, education, airport, railways and metro infrastructure sectors, including to Maha Mumbai Metro Operation Corporation Limited and Education Department, Brihanmumbai Municipal Corporation.
As of March 31, 2023, it provided its services to 134 hospitals and medical colleges, 224 schools and colleges (other than medical colleges), two airports, four railway stations and 10 metro stations, along with catering services on certain trains/ train routes.
Size: The size of the IPO is just Rs. 300.12 Cr. HNI portion is Rs. 45.01 Cr and Retail portion is Rs. 105.04 Cr with 73457 applications, it can get one time subscribed. So, the IPO will get oversubscribed easily.
Financials: In India, the market for integrated facilities management services is growing at high rate and in this market, Krystal has created its own space. The company earns strong topline and bottom-line with 23.53% return on NetWorth.
Guidance: The company operates in fast-growing market of integrated management services. It has good topline and bottomline. The shares are offered at reasonable valuations. However, at the time of listings, these IMS companies have provided negligible returns. So, such trend/sentiment may also affect listing of this IPO. However, for the long-term investors, we recommend, Apply.
Gopal Snacks IPO Guidance
(IPO opens on 6 March, Closes on 11 March)
Gopal Snacks is fast-moving consumer goods company in India, offering ethnic snacks, western snacks and other products across India and internationally. In Fiscal 2023, it was the fourth largest brand in the organised sector of ethnic savouries (including gathiya) in terms of market share in India and the largest manufacturer of gathiya (in terms of production volume and sales revenue) and snack pellets (in terms of production volume) in India. In Fiscal 2023, it was the second largest organised ethnic namkeen manufacturer in Gujarat with Gujarat among the top states with high consumption of snacks in India, and the fourth largest packaged ethnic namkeen manufacturer in India, each in terms of sales revenue.
The Indian market for savoury snacks is projected to grow at a CAGR of approximately 11% reaching Rs. 1,217 billion by Fiscal 2027.
Size: The size of the IPO Rs. 650 Cr. is not quite large. HNI portion is just Rs. 96.97 cr, so chances of oversubscription are very high. With 152507 applications, retail potion will get one time subscribed which is also not at all difficult.
Financial Snapshot & Guidance: Compared to Bikaji and Pratap snacks, the company has solid topline and also bottomline. The shares are offered at attractive valuation, and it leaves room for listing gains. The Indian market for savoury snacks is projected to grow at a CAGR of approximately 11% reaching Rs. 1,217 billion by Fiscal 2027. More and more large corporations are entering this market, which will also help to expand the overall market and profitability of this company. Apply with full force.
J.G. Chemicals IPO Guidance
(Opens on 5 March 2024, Closes on 7 March)
J.G.Chemicals is the largest manufacturer of zinc oxides in India and among the top ten manufacturers of zinc oxides globally, with an installed capacity of 59,904 MTPA for zinc oxide, 7,056 MTPA for zinc ingots and 10,080 MTPA capacity for zinc sulphate and other allied chemicals.
Since its incorporation in 2001, it has expanded its business and scale of operations and have grown into a large, diversified zinc oxide player with a global footprint. The product caters to a wide spectrum of industrial applications, including in the rubber (tyre & other rubber products), ceramics, paints & coatings, pharmaceuticals & cosmetics, electronics & batteries, agro-chemicals & fertilizers, specialty chemicals, lubricants, oil & gas and animal feed.
Owing to its legacy of over four decades in manufacturing businesses, it benefits from its experience in catering to a wide array of customers and it has built a long-standing relationship with customers across end-user industries in the Tyres, ceramics, rubber, paints, cosmetics and batteries industry.
Size: The net size of this IPO is just Rs. 180.53 Cr. out which 1763572 shares are offered to the HNIs ( Rs.38.97 Cr.) Looking to the Small size and fancy of the investors, huge oversubscription for this IPO is assured.
Financial snapshot: The company has consistent growth & performance during last 3 years.
Guidance: The shares at upper price band are offered at PE multiple of 12.76 (as compared to the PE multiple of 30.97 by Nocil ). Thus, the offer price leaves room for listing gains as well good returns in the 6/9 months post listing. Fancy is visible in the grey market for this IPO. Apply with full force.
R K Swamy IPO Guidance:
(Opens on 4 March 2024, Closes on 6 March 2024)
R K Swamy Ltd is the largest Indian majority owned integrated marketing services provider in India, offering a single window solution for creative, media, data analytics and market research services. It is among the top 10 diversified integrated marketing communications services groups operating in India
with a comprehensive range of services in the following interrelated and complementary business segments: (i) Integrated Marketing Communications, (ii) Customer Data Analytics and Marketing Technology (“Customer Data Analytics and MarTech”); and (iii) Full-Service Market Research (including customer experience measurement) and Syndicated Studies (“Full-Service Market Research”).
It has a track record of over five decades, and have been serving leading companies.
It is a data driven integrated marketing services provider and all segments of its business use digital initiatives extensively. During Fiscal 2023, it released over 818 creative campaigns on behalf of its clients across various media outlets, handled over 97.69 terabytes of data and have conducted over 2.37 million consumer interviews across quantitative, qualitative and telephonic surveys.
Its solutions and offerings are serviced by over 2,391 employees spread across 12 offices and 12 field locations across twelve cities, across our three business segments.
Size of the IPO: The size of the IPO is just Rs. 429.56 Cr, out of which HNI portion is only Rs. 64.43 Cr and Retail portion is Rs. 42.96 Cr. So huge oversubscription is expected in both the categories.
Guidance: The share at the upper price band is offered at PE multiple of 40.97 times. Under normal circumstance, the valuation is somewhat on higher side. However, looking to strong investment craze now-a-days, this offer-price can be taken as reasonable. Marginal listing gains are expected; however, the scrip is expected to provide solid returns in 6 to9 months post-listing. Do Apply.
Mukka Proteins IPO Guidance:
Consistently being awarded by MPEDA, during the last 7 years for our export performance, inter alia,
including as an outstanding performance in export of fish meal, fish oil and allied products for Fiscal 2021, Fiscal 2020 and Fiscal 2019, the company is one of the key players of the Fish Protein industry in India. In Fiscal 2022, of the total estimated revenue of the Indian fish meal and fish oil industry of Rs.13,000 to Rs. 17,000 million, the revenue of its Company was Rs.6,928.87 million thus, being 45%-50% contributor to the estimated revenue of the Indian fish meal and fish oil industry for the corresponding period. The Company is also amongst the first few Indian companies to have commercialised insect meal and insect oil as an ingredient for aqua feed, animal feed and pet food.
Size: The net size of the IPO is Rs. 224 Cr comprising of 8000000 shares. Considering the recent IPO trends, the IPO is very small. With just 5333 applications, the retail portion will get oversubscribed one time. The HNI portion is just Rs. 33.60 Cr, so oversubscription may not be an issue.
Financial Angle: In the 3 years, prior to the IPO, the total income and net profits have shown steady rise, except sharp rise in the net profits in the year 2022-23. If the company can maintain its profits of the year 2022-23, then the offer price of Rs. 28 is reasonably priced.
One more Aspect: The company deals in fish meal and fishoil. Many of the investors avoid investing in such businesses and this may affect the fancy and over-subscription.
Grey Market Aspect: Currently, grey market has huge bearing on the listing trends of most of the IPOs. So you may take clue from grey market trend and then take final decision.
Exicom Tele-Systems IPO Guidance
Exicom Tele-Systems is an India headquartered power management solutions provider, operating under two business verticals, (i) electric vehicle supply equipment (“EV Charger(s)”) solutions business, wherein it provides smart charging systems with innovative technology for residential, business, and public charging use in India; and (ii) Critical power solutions business, wherein it designs, manufactures and services critical digital infrastructure technology to deliver overall energy management at telecommunications sites and enterprise environments in India and overseas. It is amongst the first entrants in the EV Chargers manufacturing segment in India and as of March 31, 2023, it is amongst the market leaders, with a market share of 60% and 25% in the residential and public charging segments, respectively.
Size: The size of the IPO is very small ( Rs.429 Cr). The retail portion is just Rs. 64.35 Cr and HNI portion is only Rs. 42.90. So huge oversubscription is evident.
Guidance: Now-a-days EV, Solar etc catch fancy of the investors. With Good turnover, market share and profitability, if the IPO catch fancy of the investors, it is natural. Size of the IPO is very small, so huge oversubscription, will add to the interest cost. The Grey market has already factored in the interst-costs and the premium prevails at high level. (Rs. 154 Vs IPO offer price of Rs. 142 at 27 Feb Morning). Tatas, Adanis etc have entered these market with full money power, so we cannot comment about the long-term future of these company, yet oversubscription and listings are concerned, it will be impressive. Apply.
Platinum Industries IPO Guidance
Platinum Industries is a multi-product company engaged in the business of manufacturing stabilizers. Its business segment includes PVC stabilizers, CPVC additives and lubricants. It operates in the speciality chemicals industry. Its products find their application in PVC pipes, PVC profiles, PVC fittings, electrical wires and cables, SPC floor tiles, Rigid PVC foam boards, packaging materials, etc.
Size: The size of the IPO is just Rs. 216.05 Cr. Retail portion is only Rs.75.62 Cr. So huge oversubscription is possible.
Guidance: The Shares are offered at very attractive valuation of 16.67 PE multiple. However compared to the valuation of peer companies, the turnover of this company is very small. Accordingly, it may not command the valuation enjoyed by Supreme Industries etc. At present, the market considers huge oversubscription and impeding interest-costs. So the premium in the grey market has moved up to Rs. 100 Vs. Issue price of Rs. 171. Chances of allotment will be tough. Do remember, the existing premium may not be reflected in the gains at the time of listing. Apply
Mukka Proteins IPO Guidance:
Consistently being awarded by MPEDA, during the last 7 years for our export performance, inter alia,
including as an outstanding performance in export of fish meal, fish oil and allied products for Fiscal 2021, Fiscal 2020 and Fiscal 2019, the company is one of the key players of the Fish Protein industry in India. In Fiscal 2022, of the total estimated revenue of the Indian fish meal and fish oil industry of Rs.13,000 to Rs. 17,000 million, the revenue of its Company was Rs.6,928.87 million thus, being 45%-50% contributor to the estimated revenue of the Indian fish meal and fish oil industry for the corresponding period. The Company is also amongst the first few Indian companies to have commercialised insect meal and insect oil as an ingredient for aqua feed, animal feed and pet food.
Size: The net size of the IPO is Rs. 224 Cr comprising of 8000000 shares. Considering the recent IPO trends, the IPO is very small. With just 5333 applications, the retail portion will get oversubscribed one time. The HNI portion is just Rs. 33.60 Cr, so oversubscription may not be an issue.
Financial Angle: In the 3 years, prior to the IPO, the total income and net profits have shown steady rise, except sharp rise in the net profits in the year 2022-23. If the company can maintain its profits of the year 2022-23, then the offer price of Rs. 28 is reasonably priced.
One more Aspect: The company deals in fish meal and fishoil. Many of the investors avoid investing in such businesses and this may affect the fancy and over-subscription.
Grey Market Aspect: Currently, grey market has huge bearing on the listing trends of most of the IPOs. So you may take clue from grey market trend and then take final decision.
GPT Healthcare Main board IPO Guidace
GPT Healthcare is one of the leading regional corporate healthcare companies in Eastern India . It operates a chain of mid-sized multispecialty hospitals in Eastern India under the “ILS Hospitals” brand and provide integrated healthcare services, with a focus on secondary and tertiary care. As of September 30, 2021, it operates 4 multispecialty hospitals, with a total capacity of 556 beds. It offers a comprehensive range of healthcare services across over 35 specialties and super specialties.
The healthcare delivery market in India is expected to grow at a CAGR of 15% – 17% between Fiscal Years 2021 and 2025.
Just have a look at the ratio analysis. Upper Price Band/last EPS: 38.11 & Upper offer price/Book Value Ratio 9.05.
The shares are offered at the PE Multiple of 38.11. If we consider the valuations of listed peer healthcare companies, this IPO offers limited room for listing gains. IPO size is just Rs. 525.14 Cr. So oversubscription will not be an issue. Not so attractive.
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Juniper Hotels IPO Guidance
Juniper Hotels is a luxury hotel development and ownership company, and are the largest owner, by number of Keys of “Hyatt” affiliated hotels in India as of June 30, 2023. It has a portfolio of seven
hotels and serviced apartments and operate a total of 1,836 keys.
It is the only hotel development company in India with which Hyatt has a strategic investment. It owns 20% of Hyatt group affiliated hotel rooms in India as on June 30, 2023.
Size: The size of this mainboard IPO is Rs. 1800 cr. However, retail portion is just Rs. 180 cr and HNI portion is Rs. 270 Cr. So, convincing the QIBs to invest in this hospitality company may not quite difficult. Retail and HNI portions being relatively very small, oversubscription may not be any issue.
Financial Snapshot. Because of booming hotel sector, the company also displayed sharp rise in its topline during last 3 years. It has incurred losses in the last 3 years, but the losses have steadily declined. The world over, Hyatt brand signifies luxury and even in India, the Hyaat hotels reflect the same image and reputation. Though the IPO-offer price is at negative PE multiple, the listing may give positive returns. Apply.
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