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Carraro India Limited IPO
Carraro India Limited IPO: Overview and Subscription Details – All You Need to Know

Carraro India Limited IPO- Overview

The Carraro India IPO is a book-built issue worth ₹1,250 crores, entirely comprising an Offer for Sale (OFS) of 1.78 crore shares. The IPO opens for subscription on December 20, 2024, and closes on December 24, 2024, with the allotment expected to be finalized on December 26, 2024. The tentative listing date is set for December 30, 2024, on the BSE and NSE. The price band is fixed at ₹668 to ₹704 per share. Retail investors can apply for a minimum lot size of 21 shares, requiring an investment of ₹14,784. For small non-institutional investors (sNII), the minimum investment is ₹2,06,976 for 294 shares (14 lots), while large non-institutional investors (bNII) need to invest ₹10,05,312 for 1,428 shares (68 lots). The IPO provides an opportunity to invest in a well-established entity while catering to a diverse range of investors. 

Period 

The Carraro India IPO is scheduled to open for subscription on December 20, 2024, and will close on December 24, 2024. The share allotment is expected to be finalized by December 26, 2024, with the tentative listing date set for December 30, 2024, on both the BSE and NSE. 

Pricing and Lot Details

The Carraro India IPO offers investors an opportunity to invest in a leading manufacturer of transmission systems and axles for off-highway vehicles. Below are the key details: 

  • Price Band: ₹668 to ₹704 per share. The lower limit is ₹668, while the upper cap is ₹704. 
  • Lot Size: A minimum investment requires 21 shares, amounting to approximately ₹14,784 at the upper price band.  
  • Issue Size: The IPO aims to raise a total of ₹1,250 crore, entirely through an Offer for Sale (OFS) of 1.78 crore shares. 
  • Face Value: ₹10 per equity share, with the IPO price reflecting a premium based on the company’s valuation and market demand. 
  • The Carraro India IPO follows a structured bidding system that accommodates various investor categories, including Retail Investors, Small Non-Institutional Investors (sNIIs), and Large Non-Institutional Investors (bNIIs). Below is a breakdown of investment requirements: 
Category Lots Shares Investment Amount (₹) 
Retail Investors Minimum: 1 34 14,784 
Retail (Max) Maximum: 13 273 1,92,192 
Small HNIs (Min) Minimum: 14 294 2,06,976 
Small HNIs (Max) Maximum: 67 1,407 9,90,528 
Large HNIs (Min) Minimum: 68 1,428 10,05,312 

Reservation Structure 

The Carraro India IPO follows a structured reservation system to ensure participation from diverse investor categories: 

  • Qualified Institutional Buyers (QIBs): 50% of the total issue is reserved for QIBs, including mutual funds, foreign institutional investors, banks, and other large financial institutions. 
  • Non-Institutional Investors (NIIs): 15% of the issue is allocated to NIIs, including high-net-worth individuals (HNIs) who bid for larger lot sizes. 
  • Small HNIs (sNIIs): Minimum 14 lots (294 shares), amounting to ₹2,06,976 at the upper price band.  
  • Large HNIs (lNIIs): Minimum 68 lots (1,428 shares), totaling ₹10,05,312 at the upper price band.  
  • Retail Investors: 35% of the total issue is reserved for retail investors. 
  • Minimum lot size: 1 lot (21 shares), requiring an investment of ₹14,784 at the upper price band. 

This reservation system ensures balanced participation across institutional and individual investors while catering to varying investment capacities. 

Key Dates & Timelines 

Carraro India Limited IPO Timeline (December 2024) 

  • IPO Open Date: Friday, December 20, 2024 
  • IPO Close Date: Tuesday, December 24, 2024 
  • Basis of Allotment: Thursday, December 26, 2024 
  • Initiation of Refunds: Friday, December 27, 2024 
  • Credit of Shares to Demat Accounts: Friday, December 27, 2024 
  • Listing Date on BSE and NSE: Monday, December 30, 2024 

Book Running Lead Managers 

​ The Carraro India Limited is being managed by the following Book Running Lead Managers (BRLMs): 

  • ICICI Securities Limited  
  • HDFC Bank Limited 
  • Kotak Mahindra Capital Company Limited 

The registrar for the IPO is Link Intime India Private Limited, responsible for processing applications, managing the allotment process, and handling refund-related activities for the IPO. 

Promoters Information 

Carraro India is led by a seasoned management team with extensive experience in the automotive components industry. 

  • Balaji Gopalan, the Managing Director, has been with the company since September 1, 1998. He holds a Doctor of Philosophy in Human Resource Management from the University of Pune and is responsible for achieving revenue, EBITDA, and CSR targets. 
  • Andrea Conchetto, a Non-Executive Director, holds a diploma in Electrotechnical Engineering from the University of Padua. He is associated with the Carraro Group, including Carraro S.p.A., Carraro Drive Tech Italia S.p.A., Carraro China Drive Systems Co. Ltd, and Siap S.p.A. 
  • Enrico Gomiero, also a Non-Executive Director, holds a diploma as an accountant and commercial expert from the Technical Institute for Commercials and Surveyors of Padua. He is associated with various entities in the Carraro Group, including Carraro S.p.A., Carraro Drive Tech Italia S.p.A., Carraro Finance S.p.A., Carraro International S.E., and Siap S.p.A. 
  • Davide Grossi, the Whole-time Director and Chief Financial Officer, holds an undergraduate degree in Business Administration and a Master’s in Accounting, Corporate Finance, and Control from Bocconi University. He has previously been associated with Alten Sverige AB, Isagro (Asia) Agrochemicals Pvt. Ltd., and Deloitte & Touche S.p.A. 
  • Sudhendra Mannikar, the Whole-time Director and Chief Operating Officer, has been with the company since August 2, 1999. He holds a Bachelor’s degree in Engineering (Production) and an MBA from the University of Pune. He was previously associated with Essar Projects Limited. 

The promoters of Carraro India include Tomaso Carraro, Enrico Carraro, Carraro S.p.A., and Carraro International S.E. 

This leadership team brings a wealth of expertise and strategic vision to Carraro India, positioning the company for sustained growth and success in the automotive components sector. 

About Carraro India Ltd. 

Carraro India Limited, established in 1997, is a technology-driven and integrated supplier specializing in the development of complex engineering products and solutions for original equipment manufacturers (OEMs). The company focuses on axles, transmission systems, and gears tailored for the agricultural tractor and construction vehicle industries in India. As an independent Tier-1 solution provider, Carraro India offers mission-critical components that are integral to its customers’ final products. sThe company’s product portfolio includes axles and transmission systems designed for agricultural tractors and construction vehicles such as backhoe loaders, soil compactors, cranes, self-loading concrete mixers, and small motor graders. It also manufactures gears, shafts, and ring gears for industrial and automotive vehicles. Carraro India caters to a diverse range of off-highway vehicles, offering axles and transmission systems across various horsepower (HP) categories. 

The agricultural tractor segment, which dominates the Indian market with a 90% share, is driven by farm mechanization and favourable government policies. Meanwhile, the construction vehicle segment, holding the remaining 10%, is bolstered by significant infrastructure investments. The Indian government’s ₹10 lakh crore budget allocation for infrastructure development in 2023–24, alongside the ₹27 lakh crore National Infrastructure Pipeline (NIP) investment by FY2025 and ₹7 lakh crore for road and highway projects over the next 2–3 years, is expected to drive robust demand for construction vehicles. 

Financial Highlights Summary

  1. Revenue Growth: The company achieved consistent growth in operating revenue, increasing from ₹1,497.54 Cr in FY22 to ₹1,788.96 Cr in FY24, showcasing robust demand and operational efficiency.
  2. Profitability Metrics:
    • EBITDA: Improved from ₹82.86 Cr in FY22 to ₹149.99 Cr in FY24, with margins rising from 5.45% to 8.30%, highlighting better cost management.
    • PAT: Grew from ₹22.42 Cr in FY22 to ₹62.56 Cr in FY24, with PAT margins improving from 1.50% to 3.50%.
  3. Return Metrics:
    • ROCE: Increased from 10% in FY22 to 19.35% in FY24, reflecting efficient resource utilization.
  4. Cash Flow & Liquidity:
    • CFOA: Despite fluctuations, stable operational cash flows support liquidity and operational health.
  5. Asset & Equity Growth:
    • Total assets grew from ₹1,012.44 Cr in FY22 to ₹1,072.89 Cr in FY24, while net worth rose from ₹292.49 Cr to ₹369.82 Cr, reinforcing financial stability.
  6. Debt Management: Controlled borrowing with total debt at ₹212.55 Cr in FY24 indicates balanced financial management.

Overall: The company exhibits strong revenue growth, enhanced profitability, efficient capital use, and solid financial health, ensuring a positive outlook for stakeholders.

IPO Objectives 

The Carraro India Limited Initial Public Offering (IPO) is structured entirely as an Offer for Sale (OFS), wherein the promoter selling shareholder will divest a portion of their stake. Consequently, the company itself will not receive any proceeds from this offering. All funds generated will be directed to the promoter selling shareholder, net of offer-related expenses and applicable taxes.  

In an OFS, existing shareholders sell their shares to the public, allowing them to monetize their holdings. This approach does not result in capital inflow to the company but enables the promoters to reduce or liquidate their ownership stake. For investors, participating in such an IPO provides an opportunity to invest in a company with an established operational history and financial track record. 

It’s important to note that since the company won’t receive any proceeds from this IPO, there won’t be immediate capital available for business expansion or debt reduction. Investors should consider this aspect when evaluating the potential impact of the IPO on the company’s future growth and financial strategy. 

Subscription Status as of December 20, 2024, 05:00 PM 

Investor Category Subscription (times) Explanation 
Qualified Institutional Buyers (QIB) 0 No subscription from QIBs on the current day. 
Non-Institutional Investors (NII) 0.06 Limited participation from NIIs, indicating a 6% subscription of their portion. 
– bNII (bids above ₹10L) 0.04 High-value bids (above ₹10L) accounted for only 4% of the allotted category. 
– sNII (bids below ₹10L) 0.1 Smaller value bids (below ₹10L) achieved a 10% subscription. 
Retail Investors 0.16 Stronger interest from retail investors with a 16% subscription rate. 
Total 0.09 The overall subscription rate across all categories is 9%, reflecting moderate interest. 

Conclusion: 

Carro India Limited, a company in the [specific industry, e.g., automobile, technology, etc.], presents both opportunities and risks for potential investors. Here are key factors to consider before deciding to invest: 

Positives: 

  • Growth Potential: If the company operates in a high-growth sector with favorable macroeconomic trends, it may benefit from increased demand. 
  • Financial Strength: Analyze its revenue growth, profitability margins, and debt levels. Consistent growth in revenue and profit would indicate a strong financial position. 
  • Competitive Edge: The company might hold unique advantages, such as innovative technology, cost-efficiency, or a strong brand reputation in the market. 
  • Industry Position: Evaluate the company’s standing compared to peers. A leadership position in a niche market could indicate long-term growth potential. 

Concerns: 

  • Valuation: Assess the Price-to-Earnings (P/E) ratio and compare it with industry peers. A high valuation could indicate that the stock is overvalued. 
  • Operational Risks: Analyze the risks in supply chain management, raw material costs, and dependency on specific markets or clients. 
  • Market Sentiment: If subscription numbers (e.g., from QIBs, NIIs, retail investors) are low, it may suggest weak investor confidence. 
  • Macroeconomic Risks: Factors like interest rate hikes, inflation, or geopolitical issues could impact the company’s growth prospects. 

Before investing, thoroughly review the company’s Red Herring Prospectus, assess the subscription demand across investor categories, and consult with a financial advisor. Investing in IPOs carries inherent risks, so ensure the investment aligns with your financial goals and risk appetite. 

DAM Capital Advisors Ltd IPO
DAM Capital Advisors Ltd: IPO Overview and Subscription Details – All You Need to Know

DAM Capital Advisors IPO is a book-built issue of Rs 840.25 crores. It is entirely an offer to sell 2.97 crore shares. 

About DAM Capital Advisors Limited 

DAM Capital Advisors Limited, founded on May 7, 1993, is a renowned investment bank in India. DAM Capital serves its customers with investment banking services which include equity capital markets (“ECM”), mergers and acquisitions (“M&A”), private equity (“PE”), and structured finance counselling, as well as institutional equities services such as broking and research. Their primary concentration is on the Indian capital market, which is currently one of the fastest-growing marketplaces in the world. As of July 31, 2024, they have completed 67 ECM transactions, including five offers for sale, six preferential issues, three rights issues, seven buybacks, four open offers, one initial public offering of units by a real estate investment trust, 26 IPOs, and 15 placements by qualifying institutions. Moreover, till July 31, 2024, DAM Capital Advisory has also advised on 20 advisory transactions including M&A advisory, private equity advisory and structured finance advisory, and has also executed block trades. On March 31, 2024, the revenue increased by 114% and profit after tax (PAT) increased by 713%. 

IPO Subscription Period 

  • Open Date: December 19, 2024 
  • Close Date: December 23, 2024 
  • Allotment Date: December 24, 2024 
  • Listing Date: December 27, 2024 
  • Stock Exchanges: BSE and NSE 

Pricing Details  

  • Price Band: ₹269 – ₹283 per Share 
  • Face Value: ₹2 per Share 
  • Minimum Lot Size: 53 shares 
  • Investment Requirement: 
  • Retail Investors: Minimum ₹14999 (53 shares) 
  • Small Non-Institutional Investors (sNII): 14 lots (742 shares) – ₹209986 
  • Big Non-Institutional Investors (bNII): 67 lots (3551 shares) – ₹1004933 

Reservation Structure 

  • Qualified Institutional Buyers (QIB): 19.95% (5924182 shares) 
  • Non-Institutional Investors (NII): 14.96% (4443135 shares) 
  • Big NII (bNII): 10% 
  • Small NII (sNII): 5% 
  • Retail Investors: 34.92% (10367315 shares) 
  • Anchor Investors: 29.93% (8886268 shares)  

Key Dates and Timeline 

  • IPO Open Date: December19, 2024 
  • IPO Close Date: December 23, 2024 
  • Basis of Allotment: December 24, 2024 
  • Initiation of Refunds: December 26, 2024 
  • Credit of Shares to Demat: December 26, 2024 
  • Listing Date: December 27, 2024 
  • Cut-off time for UPI mandate confirmation: 5 PM on December 23, 2024 

Book Running Lead Managers 

DAM Capital Advisors Limited has appointed prominent financial institutions as book-running lead managers for the IPO: 

  • Nuvama Wealth Management Limited 

Link Intime India Private Limited has been designated as the registrar for the IPO. 

Promoter Information 

  • Promoter: The promoters of the company are Dharmesh Anil Mehta, Sonali Dharmesh Mehta and Boombucket Advisors Private Limited. 
  • Shareholding: 
  • Pre-Issue: 45.88% 
  • Post-Issue: 39.89% 

Financial Highlights 

  • Revenue: In FY22 revenue was ₹94.51 crores, in FY23 it was ₹85.04 crores and in FY24 it is ₹182 crores. 
  • Profit after Tax (PAT): PAT has increased year on year, FY23 ₹8.67 crores to in FY24 ₹70.52 crores. 
  • Net Worth: ₹162 crores 
  • Total Borrowing: ₹4.93 crores 

Key Performance Indicators (KPIs): 

  • ROE: 54.72% 
  • RoNW: 44.98% 
  • P/BV: 12.76 
  • EPS (Pre-IPO): ₹9.98 
  • EPS (Post-IPO): ₹9.98 
  • P/E Ratio (Pre-IPO): 28.37x 
  • P/E Ratio (Post-IPO): 28.4x 

IPO Objectives 

  • The company will not receive any proceeds of the Offer for Sale by the Selling Shareholders. 

Subscription Status (As of December 20, 2024) 

  • Retail: 5.11x 
  • QIB: 0.01x 
  • NII: 5.32x 
  • Overall Subscription: 3.71x 

Recommendation 

DAM Capital Advisors Ltd. is a great company which don’t need any funds for operations or expansions. It has enough cash reserves to pay the minimal debt on the balance sheet. The revenue numbers are really great and have potential to rise more in future. Grey Market Premium (GMP) is really high shows good listing gain and also good for long term investment in company. 

Sanathan Textiles Limited IPO
Sanathan Textiles Limited IPO: Key Highlights and Subscription Details

Sanathan Textiles Limited IPO- Overview 

Sanathan Textiles Limited, a leading textile manufacturer, is launching its Initial Public Offering (IPO) with a total issue size of ₹550 crore. The offering includes a fresh issue of 1.25 crore shares worth ₹400 crore and an Offer for Sale (OFS) of 0.47 crore shares valued at ₹150 crore. The IPO will be open for subscription from December 19 to December 23, 2024, with allotment details finalized on December 24, 2024. Shares are set to list on BSE and NSE on December 27, 2024. The price band for the IPO is ₹305 to ₹321 per share. Retail investors can participate with a minimum lot size of 46 shares, requiring an investment of ₹14,766. Small Non-Institutional Investors (sNII) must invest in a minimum of 14 lots (644 shares), totalling ₹2,06,724, while Large Non-Institutional Investors (bNII) need at least 68 lots (3,128 shares), amounting to ₹10,04,088. Sanathan Textiles plans to utilize the proceeds from the fresh issue for capacity expansion, debt reduction, and working capital requirements. With its strong presence in the textile sector and the growing demand for Indian textile exports, this IPO offers investors a promising opportunity in a sector poised for significant growth. 

IPO Subscription Period 

The Sanathan Textiles Limited IPO is scheduled to open for subscription on December 19, 2024, and will close on December 23, 2024. The share allotment is expected to be finalized by December 24, 2024, with the tentative listing date set for December 27, 2024, on both the BSE and NSE. 

Pricing and Lot Details 

The Sanathan Textiles Limited IPO offers investors an opportunity to participate in the growth of a leading textile manufacturer. Below are the key details: 

  • Price Band: ₹305 to ₹321 per share. The lower limit is ₹305, while the upper cap is ₹321. 
  • Lot Size: A minimum investment requires 46 shares, amounting to approximately ₹14,766 at the upper price band.  
  • Issue Size: The IPO aims to raise a total of ₹550 crore, comprising a fresh issue of 1.25 crore equity shares worth ₹400 crore and an Offer for Sale (OFS) of 0.47 crore shares valued at ₹150 crore. 
  • Face Value: ₹2 per equity share, with the IPO price reflecting a premium based on the company’s valuation and market demand. 
  • The Sanathan Textiles IPO follows a structured bidding system that accommodates various investor categories, including Retail Investors, Small Non-Institutional Investors (sNIIs), and Large Non-Institutional Investors (bNIIs). Below is a breakdown of investment requirements: 
Category Lots Shares Investment Amount (₹) 
Retail Investors Minimum: 1 46 14,766 
Retail (Max) Maximum: 13 598 1,91,958 
Small HNIs (Min) Minimum: 14 644 2,06,724 
Small HNIs (Max) Maximum: 67 3,082 9,89,322 
Large HNIs (Min) Minimum: 68 3,128 10,04,088 

Reservation Structure 

The Sanathan Textiles Limited IPO employs a structured reservation system to ensure participation from diverse investor categories: 

  • Qualified Institutional Buyers (QIBs): 50% of the total issue is reserved for QIBs, including mutual funds, foreign institutional investors, banks, and other large financial institutions. 
  • Non-Institutional Investors (NIIs): 15% of the issue is allocated to NIIs, including high-net-worth individuals (HNIs) who bid for larger lot sizes. 
  • Small HNIs (sNIIs): Minimum 14 lots (644 shares), amounting to ₹2,06,724 at the upper price band. 
  • Large HNIs (lNIIs): Minimum 68 lots (3,128 shares), totalling ₹10,04,088 at the upper price band. 
  • Retail Investors: 35% of the total issue is reserved for retail investors. 
  • Minimum lot size: 1 lot (46 shares) requiring an investment of ₹14,766 at the upper price band. 

This reservation system ensures balanced participation across institutional and individual investors while catering to varying investment capacities. 

Key Dates & Timelines Of Sanathan Textiles Limited IPO Timeline (December 2024) 

  • IPO Open Date: Thursday, December 19, 2024 
  • IPO Close Date: Monday, December 23, 2024 
  • Basis of Allotment: Monday, December 16, 2024 
  • Initiation of Refunds: Wednesday, December 25, 2024 
  • Credit of Shares to Demat Accounts: Thursday, December 26, 2024 
  • Listing Date on BSE and NSE: Friday, December 27, 2024 

Book Running Lead Managers 

​ The Sanathan Textiles Ltd IPO is being managed by the following Book Running Lead Managers (BRLMs): 

  • Dam Capital Advisors Ltd (formerly IDFC Securities Ltd)  
  • ICICI Securities Ltd 

The registrar for the IPO is KFin Technologies Ltd, which is responsible for processing applications and managing the allotment process, and handling refund-related activities for the IPO. 

Promoters Information 

Sanathan Textiles is led by an experienced management team with deep roots in the textile industry.  

  • Paresh Vrajlal Dattani, the Chairman and Managing Director, has been serving on the Board since October 10, 2005. A science graduate from the University of Calcutta, he brings 46 years of experience to the company. He oversees the company’s overall performance, drives growth strategies, and provides leadership guidance. In addition, he has been a partner at Ramniklal Nandlal Bros since 1978. 
  • Ajay Vallabhdas Dattani, the Joint Managing Director, has also been on the Board since October 10, 2005. A commerce graduate (honors) from the University of Calcutta, Ajay plays a key role in the operations and expansion of the cotton division, as well as overseeing finance, production, and compliance. With over 18 years of experience in the textile industry, he contributes significantly to the company’s operational growth. 
  • Anilkumar Vrajdas Dattani, the Executive Director, joined the Board on the same date and is a commerce graduate from the University of Bombay. He oversees corporate social responsibility initiatives and administrative functions of the company. Like Paresh, Anilkumar has 46 years of industry experience and has been a partner at Ramniklal Nandlal Bros since 1978. 

The collective expertise and leadership of the Dattani family form the backbone of Sanathan Textiles, ensuring strong strategic direction and operational excellence. 

About Sanathan Textiles Ltd. 

Sanathan Textiles Limited, incorporated in 2005, is a leading polyester yarn manufacturer and global supplier of cotton yarn. The company operates through three key business verticals: polyester yarn products, cotton yarn products, and yarns for technical textiles and industrial uses. These technical textiles are utilized across various industries, including automotive, healthcare, construction, sports and outdoor activities, and protective clothing. With a robust manufacturing base in Silvassa, Sanathan Textiles serves a broad range of clients worldwide and is known for its diversified product offerings. 

As of September 30, 2024, Sanathan Textiles had more than 3,200 active varieties of yarn products manufactured between April 1, 2021, and September 30, 2024. The company can produce over 14,000 varieties of yarn products and more than 190,000 stock-keeping units (SKUs), which are used across multiple end applications. In terms of global reach, Sanathan Textiles exports its products to 14, 27, and 29 countries in 2024, 2023, and 2022, respectively. The company also has a strong distribution network, with over 925 distributors in seven countries, including India, Argentina, Singapore, Germany, Greece, Canada, and Israel. 

Sanathan Textiles’ client base includes some of the most reputable names in the textile and garment industries, such as Welspun India Limited, Valson Industries Limited, G.M. Fabrics Private Limited, Premco Global Limited, and Banswara Syntex Limited. This extensive and diverse clientele reflects the company’s ability to cater to a wide array of requirements, from large multinational corporations to regional businesses. 

One of the key strengths of Sanathan Textiles is its presence across multiple sectors, including polyester, cotton, and technical textiles. This diversification gives the company a competitive edge in the Indian market. The company places a strong emphasis on product development, focusing on process innovation to meet the evolving demands of the textile industry. Additionally, the fully integrated yarn manufacturing plant is strategically located and equipped with state-of-the-art machinery from both domestic and globally renowned suppliers, ensuring the production of high-quality yarn products. 

Sanathan Textiles’ long-standing relationships with consumer brands have resulted in a low customer concentration, which reduces dependency on any single client. The company’s deep understanding of optimal product assortment and its well-established supplier network contribute to efficient procurement practices, ensuring competitive pricing. This operational efficiency is further supported by a healthy financial performance and an experienced management team with a proven track record in the textile sector. 

The company’s strategic focus includes expanding manufacturing capacity, enhancing the value addition in existing products, and continuing to innovate through new product development. Moreover, Sanathan Textiles aims to harness digitization and technology to enhance production processes, with a strong emphasis on energy efficiency and sustainable practices. 

Despite these strengths, there are several risks that the company faces. One of the key challenges is the lack of long-term agreements for raw materials, which may impact procurement stability. The company is also highly dependent on a small number of key suppliers for its raw materials, which could pose a risk to supply continuity. Additionally, Sanathan Textiles’ inventory turnover cycle increased to 69 days in Fiscal 2024, which could impact working capital management. 

The company also faces a high level of revenue dependency on its distributors, who contributed 96.55% of the revenue in June 2024. This concentration poses a risk to the company’s revenue stream. Furthermore, Sanathan Textiles experienced a decline in both revenue (by 11.17%) and profit after tax (by 12.37%) in Fiscal 2024, which may indicate potential financial challenges. High working capital requirements also pose a risk to operational continuity if funding is insufficient. The company’s proposed capacity expansion could face challenges if it does not match the anticipated demand growth. Lastly, the company’s heavy reliance on markets in Gujarat, Maharashtra, and Punjab exposes it to regional risks that could affect business stability. 

Financial Highlights 

Metric 30-Jun-24 31-Mar-24 31-Mar-23 31-Mar-22 Explanation 
Assets (₹ Cr) 2,529.53 2,203.68 1,906.67 1,796.47 The company’s total assets have grown consistently over the years, reflecting its expanding scale of operations and investments in its business. 
Revenue (₹ Cr) 787.76 2,979.80 3,345.02 3,201.46 Revenue dipped in Q1 FY25 compared to full-year FY24 and prior periods, indicating potential seasonality or temporary challenges in operations. 
Profit After Tax (₹ Cr) 50.07 133.85 152.74 355.44 Profitability has seen a decline, with PAT dropping significantly from FY22 to FY24 and a modest figure reported for Q1 FY25. 
Net Worth (₹ Cr) 1,324.06 1,273.98 1,140.13 987.39 The company’s net worth has steadily increased, reflecting improved equity position and retained earnings over the years. 
Total Borrowing (₹ Cr) 644.93 379.88 281 378.19 Borrowings have risen sharply in FY24 and Q1 FY25, indicating the company may be leveraging debt to fund growth or manage operations. 

IPO Objectives 

Sanathan Textiles Limited is conducting an initial public offering (IPO) to raise approximately ₹550 crore, comprising a fresh issue of ₹400 crore and an offer for sale of ₹150 crore.  

The primary objectives for utilizing the proceeds from this IPO are: 

  • Repayment and Prepayment of Borrowings: The company plans to allocate ₹160 crore to reduce its outstanding debts, thereby strengthening its financial position.  
  • Investment in Subsidiary: An amount of ₹140 crore is earmarked for investment in its subsidiary, Sanathan Polycot Pvt. Ltd., to support its growth and operations.  
  • General Corporate Purposes: The remaining funds will be utilized for general corporate needs, which may include working capital requirements, capital expenditures, and other business-related expenses.  

By addressing these areas, Sanathan Textiles aims to enhance its operational efficiency, reduce financial leverage, and support the expansion of its business operations. 

Subscription Status as of December 20, 2024, 05:58 PM 

Category Subscription Status Explanation 
Retail Individual Investor (RII) 2.1517 times The retail category was oversubscribed by 2.15 times, indicating strong interest from individual investors. 
Non-Institutional Investor (NII) 1.5253 times The NII category (high-net-worth individuals and others) was subscribed 1.52 times, showing moderate demand from this segment. 
Qualified Institutional Buyers (QIB) 0.0935 times QIBs subscribed to only 9.35% of their allotted portion, reflecting low participation from institutional investors. 
Overall Subscription 1.43 times The IPO received an overall subscription of 1.43 times, driven mainly by the retail and NII categories, while QIB demand was significantly subdued. 

Recommendation: 

  • Long-Term Investors: Sanathan Textiles could be a viable option for investors looking for a stable, low-risk opportunity in the textile sector. Its low leverage, moderate valuation, and steady profitability make it a relatively safe bet. 
  • Short-Term Investors: Given the moderate metrics, short-term gains may be limited unless market sentiment turns highly favorable. 

Action Plan: 

Before investing, consider: 

  • The industry’s current and future outlook in light of global market trends. 
  • Final IPO pricing and peer comparison to assess valuation attractiveness. 
  • Your personal investment goals and risk tolerance. 

In summary, Sanathan Textiles IPO offers stability and moderate growth potential, making it more suitable for conservative, long-term investors. 

MobiKwik IPO 2024
MobiKwik IPO 2024: Everything You Need to Know Before Investing

Mobikwik Systems Limited IPO- Overview

MobiKwik, one of India’s leading digital payment service providers and BNPL (Buy Now Pay Later) platforms, is set to launch its much-anticipated Initial Public Offering (IPO). This IPO marks a significant milestone for the fintech giant as it seeks to expand its operations and strengthen its position in the rapidly growing digital payment ecosystem. The MobiKwik IPO, a much-anticipated book-built issue worth ₹572 crore, comprises a fresh issue of 2.05 crore shares. The subscription period runs from December 11, 2024, to December 13, 2024, with the share allotment expected on December 16, 2024, and the listing date tentatively set for December 18, 2024, on the BSE and NSE. The price band for the IPO is set at ₹265 to ₹279 per share, with a minimum lot size of 53 shares, requiring retail investors to invest at least ₹14,787. For small Non-Institutional Investors (sNII), the minimum investment is 14 lots (742 shares), totalling ₹2,07,018, while big Non-Institutional Investors (bNII) need 68 lots (3,604 shares), amounting to ₹10,05,516. 

IPO Subscription Period

The MobiKwik IPO is scheduled to open for subscription on December 11, 2024, and will close on December 13, 2024. The share allotment is expected to be finalized by December 16, 2024, with the tentative listing date set for December 18, 2024, on both the BSE and NSE.

Pricing and Lot Details

The MobiKwik IPO offers investors an opportunity to participate in the growth of one of India’s leading fintech companies. Key details are as follows: 

  • Price Band: ₹ ₹265 to ₹279 per share. The lower end of the price band is ₹265, while the upper cap is ₹279. 
  • Lot Size: Investors must purchase a minimum of 53 shares, amounting to approximately ₹14,787 for retail investors at the upper price band.  
  • Issue Size: The IPO aims to raise ₹572 crore, comprising a fresh issue of 2.05 crore shares. 
  • Face Value: ₹2 per equity share. The face value represents the nominal value, with the IPO price reflecting a premium based on the company’s valuation and market demand. 
  • The MobiKwik IPO follows a structured bidding system designed to cater to various investor categories, including retail investors and high-net-worth individuals (HNIs). Below is a breakdown of investment requirements:
Application Lots Shares Amount (Rs.) 
Retail (Min) 1             53                   14,787  
Retail (Max) 13           689                1,92,231  
Small HNI (Min) 14           742                2,07,018  
Small HNI (Max) 67        3,551                9,90,729  
Large HNI (Min) 68        3,604             10,05,516  

Reservation Structure

The MobiKwik IPO has a structured reservation system to ensure participation from various investor categories: 

  • Qualified Institutional Buyers (QIBs): 75% of the total issue is reserved for QIBs. This includes mutual funds, foreign institutional investors, banks, and other large financial institutions. 
  • Non-Institutional Investors (NIIs): 15% of the issue is allocated to NIIs, including high-net-worth individuals (HNIs) who bid for larger lot sizes. 
    Small HNIs (sNIIs): Minimum 14 lots (742 shares). 
    Large HNIs (lNIIs): Minimum 68 lots (3,604 shares).  
  • Retail Investors: 10% of the issue is reserved for retail investors, with a minimum lot size of 53 shares, requiring an investment of ₹14,787 at the upper price band.

Key Dates & Timelines

MobiKwik IPO Timeline (December 2024) 

  • IPO Open Date: Wednesday, December 11, 2024 
  • IPO Close Date: Friday, December 13, 2024 
  • Basis of Allotment: Monday, December 16, 2024 
  • Initiation of Refunds: Tuesday, December 17, 2024 
  • Credit of Shares to Demat Accounts: Tuesday, December 17, 2024 
  • Listing Date on BSE and NSE: Wednesday, December 18, 2024 

Book Running Lead Managers

The MobiKwik IPO is being managed by the following Book Running Lead Managers (BRLMs): 

  • SBI Capital Markets Limited 
  • DAM Capital Advisors Limited 

The registrar for the IPO is Link Intime India Private Ltd, which is responsible for processing applications and managing the allotment process​.

​Promoters Information

Here is the promoter and key management information for the Mobikwik Systems Limited IPO: 

  • Bipin Preet Singh: Co-founder, Managing Director, and CEO One Mobikwik Systems Limited. He is a visionary entrepreneur and one of the founding pillars of MobiKwik. With a degree in engineering from the Indian Institute of Technology (IIT) Delhi, Bipin has over two decades of experience in technology and innovation. He conceptualized MobiKwik in 2009 with a vision to create a cashless economy in India. Under his leadership, MobiKwik has emerged as a leading digital payment service provider, catering to over 161 million users and 4.26 million merchants as of June 2024. Bipin continues to steer the company’s strategic direction, focusing on innovation and customer-centric solutions. 
  • Upasana Taku: Co-founder, Chairperson, and COO, Upasana Taku co-founded MobiKwik alongside Bipin Preet Singh. She holds a Master’s degree in Management Science and Engineering from Stanford University. With expertise in payments and financial technology, she has been instrumental in building MobiKwik’s operational frameworks, user acquisition strategies, and business scalability. Upasana is also recognized as one of India’s top women entrepreneurs and has driven key initiatives such as MobiKwik ZIP and other financial products. Her focus remains on enhancing operational efficiency and creating innovative credit products. 
  • Koshur Family Trust: Promoter Entity, his trust is an institutional promoter holding a significant stake in the company. The trust ensures compliance and governance while supporting the long-term growth vision of MobiKwik. 
  • Narinder Singh Family Trust: Promoter Entity, Like the Koshur Family Trust, this entity contributes to the company’s governance structure and provides backing for MobiKwik’s strategic initiatives.

About One Mobikwik Systems Ltd. 

One Mobikwik Systems Limited is a leading fintech company founded in March 2008, with a mission to drive financial inclusion for underserved populations in India. The company offers a wide range of digital wallets, payment solutions, and financial services. As of June 30, 2024, Mobikwik boasts 161.03 million registered users and 4.26 million merchants, enabling seamless transactions both online and offline. The Mobikwik app offers users a variety of payment methods, such as UPI, Mobikwik Wallet, and co-branded credit cards. Consumers can pay utility bills, shop at e-commerce platforms, purchase goods at retail outlets, and transfer money. A standout feature, Pocket UPI, allows users to make payments without linking a bank account, offering greater flexibility and ease of use. 

Mobikwik has diversified its offerings to include credit products like MobiKwik ZIP, a pay-later service with a 30-day interest-free credit line, and ZIP EMI, which provides installment-based personal loans. Additionally, the platform provides investment products such as mutual funds, digital gold, fixed deposits, and peer-to-peer lending, enhancing its financial services portfolio. Advanced features like Lens, which offers personalized financial insights, further enrich the user experience. For merchants, Mobikwik offers digital payment acceptance tools, including POS devices and soundboxes, helping businesses across Tier 2+ cities, small retailers, and large chains accept payments more efficiently. This fosters financial inclusion and supports the digital economy’s growth by catering to diverse merchant needs. With its platform-based approach, Mobikwik is empowering millions of users and merchants, driving digital payments and financial inclusion in India 

MobiKwik’s key strengths include its efficient customer acquisition model, with a low cost of ₹32.87 per user, driving substantial growth in its customer base without significant marketing expenditures. The platform also benefits from high repeat usage, with 90.30% of users returning to its MobiKwik ZIP pay-later service, demonstrating strong consumer trust. Furthermore, MobiKwik has seen robust growth in its wealth management services, evidenced by its ₹18,348M AUM in its Xtra product. The company’s use of AI-driven insights to provide personalized financial guidance enhances the user experience, while its strong brand recognition in digital payments ensures high engagement and steady daily activity. Its scalable technology platform further enables seamless transactions and ensures high system availability, supporting its large user base and operational efficiency. 

However, MobiKwik also faces several risks. Regulatory oversight by the RBI could impact its operations, as fintech companies are subject to evolving regulations. Additionally, any changes in how the net proceeds from its IPO are used could affect the company’s ability to meet its revenue expectations. Security breaches remain a significant concern, as such incidents could severely damage its reputation and financial performance. The growth in its financial services segment may not match historical trends, which could limit its ability to scale. Losing key consumer or partner networks poses another risk, potentially affecting its revenue and future prospects. Lastly, intense competition in the fintech industry from larger players like Paytm and PhonePe presents a constant challenge to MobiKwik’s market position. 

These strengths and risks collectively shape MobiKwik’s strategic outlook in the competitive fintech market.

Financial Highlights 

Particulars FY24 FY23 FY22 
Revenue from Operation (in ₹ million) 8750.03 5394.67 5265.65 
Profit/Loss After Tax (PAT) (in ₹ million) 140.79 -838.14 -1281.62 
Net Worth (in ₹ million) 1625.89 1426.94 2165.42 
Earnings per share in ₹ 2.46 -14.66 -23.04 
EBITDA (in ₹ million) 372.2 -559.2 -1154.06 
Total Borrowings (in ₹ million) 2116.99 1922.73 1509.14 
Return on Net Worth (RoNW) (%) 8.66 -58.74 -59.19 

IPO Objectives

The objective of MobiKwik’s Initial Public Offering (IPO) is to raise capital to fund its growth and expansion plans. The company intends to use the proceeds to enhance its product offerings, strengthen its technology infrastructure, and invest in customer acquisition to attract more users and merchants. Additionally, a portion of the funds will be utilized to repay or prepay certain borrowings, reducing its debt and improving financial stability. The IPO also aims to support general corporate purposes, including administrative costs and strategic investments. By going public, Mobikwik seeks to enhance its brand visibility, provide liquidity for existing shareholders, and establish access to public markets for future fundraising. These objectives align with the company’s vision of scaling its digital payments and financial services ecosystem in India’s rapidly growing fintech market. 

Subscription Status  

Investor Category Subscription (Times) 
Retail Individual Investors (RIIs) 134.67 
Non-Institutional Investors (NIIs) 108.95 
Qualified Institutional Buyers (QIBs) 119.5 
Employees Data not specified 
Overall 119.38 

Conclusion 

Should You Participate in the Mobikwik IPO? 

Deciding to invest in Mobikwik’s IPO depends on evaluating the company’s fundamentals, market position, and growth potential relative to risks. Here are key points to consider: 

Reasons to Participate 

  • Growth Potential in the Fintech Sector: India’s digital payments market is expanding rapidly, and Mobikwik is well-positioned to benefit from this trend with its strong presence in mobile wallets and Buy Now Pay Later (BNPL) services. 
  • Revenue Growth: The company has shown steady growth in revenue, driven by increased user adoption and merchant partnerships, indicating strong business traction. 
  • Digital Ecosystem Synergy: Mobikwik’s ability to integrate payments, lending, and financial services within a single platform creates cross-selling opportunities and a competitive edge. 
  • Improved Unit Economics: Recent reductions in cash burn and operating expenses signal progress toward profitability. 

Reasons to Reconsider 

  • Profitability Concerns: The company has yet to achieve consistent profitability, and its path to sustained positive earnings remains uncertain. 
  • Highly Competitive Market: Mobikwik faces fierce competition from well-funded players like Paytm, PhonePe, and Google Pay, which could impact its market share and margins. 
  • Dependence on BNPL Growth: A significant portion of its future growth relies on BNPL adoption, which is subject to regulatory scrutiny and economic cycles. 
  • Valuation Risks: Concerns about the IPO pricing being on the higher side might reduce the upside potential for investors.

Recommendation

If you have a high-risk appetite and believe in the long-term growth of India’s fintech industry, the Mobikwik IPO could be a strategic addition to your portfolio. However, investors seeking stability and immediate returns may prefer to wait for further clarity on the company’s profitability and competitive positioning. A diversified approach to fintech investments is advisable to mitigate risks. 

Suraksha Diagnostic IPO
Suraksha Diagnostic IPO: Overview, Dates, Details– All You Need to Know

IPO Overview

Incorporated in 2005, Suraksha Diagnostic Limited has grown into a prominent player in the diagnostic services sector, offering a range of pathology, radiology, and medical consultancy services. The company has announced its Initial Public Offering (IPO) to raise ₹846.25 crore, structured as a book-built issue consisting entirely of an Offer for Sale (OFS) of 1.92 crore shares.

Suraksha Diagnostic operates an extensive network across eastern India, which includes: 1 Central Reference Laboratory, 8 Satellite Laboratories, and 215 Customer Touchpoints, comprising: 49 Diagnostic Centres & 166 Sample Collection Centres.

This robust presence spans key states like West Bengal, Bihar, Assam, and Meghalaya, as of June 30, 2024. The IPO presents an opportunity for investors to engage with a well-established brand in the growing healthcare and diagnostic market in India.

IPO Subscription Period

The IPO subscription period for Suraksha Diagnostic Limited opens on November 29, 2024, and closes on December 3, 2024. The finalization of the allotment is expected by December 4, 2024, with refunds being initiated the same day.

Pricing and Lot Details

The Suraksha Diagnostic IPO presents an opportunity to invest in a leading diagnostic service provider in eastern India. Below are the key details for potential investors:

  • Price Band: ₹420 to ₹441 per share. The price band represents the range within which investors can place their bids. The lower end is ₹420, while the upper end (or cap) is ₹441.
  • Lot Size: Investors must purchase a minimum of 34 shares, totaling approximately ₹14,994 for retail investors at the highest price.
  • Issue Size: The IPO aims to raise ₹846.25 crore, consisting entirely of an Offer for Sale (OFS) of 1.92 crore shares.
  • Face Value: Rs. 1 Per Equity Share. The face value is the nominal or base value of the share. However, the IPO pricing reflects the premium set above the face value based on the company’s valuation and market demand.
  • The Suraksha Diagnostic IPO has a structured bidding system for different investor categories. Here’s a breakdown of the investment requirements for retail investors and high-net-worth individuals (HNIs):
ApplicationLotsSharesAmount (Rs)
Retail (Min)134       14,994
Retail (Max)13442   1,94,922
Small HNI (Min)14476   2,09,916
Small HNI (Max)662244   9,89,604
Large HNI (Min)672278 10,04,589

Reservation Structure

Reservation Structure for Suraksha Diagnostic IPO: The reservation structure for the Suraksha Diagnostic IPO is organized to balance participation from institutional, non-institutional, and retail investors.

  • Qualified Institutional Buyers (QIBs): 50% of the issue is reserved for QIBs. This category includes entities such as mutual funds, foreign institutional investors, banks, and other large financial institutions.
  • Non-Institutional Investors (NIIs): 15% of the issue is allocated to non-institutional investors, often high-net-worth individuals (HNIs) who bid in larger lot sizes.
  • Retail Investors: 35% of the issue is reserved for retail investors. Retail investors can bid for a minimum of 34 shares per lot, requiring an investment of ₹14,994 at the upper price band.
  • Employee Reservation: There is no specific employee reservation mentioned for the Suraksha Diagnostic IPO.

This well-structured reservation model ensures a fair distribution of the IPO, catering to a wide range of investor categories and encouraging participation across different segments of the market.

 

Key Dates & Timelines

Suraksha Diagnostic IPO Timeline (November – December 2024)

  • IPO Open Date: Friday, November 29, 2024
  • IPO Close Date: Tuesday, December 3, 2024
  • Basis of Allotment: Friday, December 6, 2024
  • Initiation of Refunds: Monday, December 9, 2024
  • Credit of Shares to Demat Accounts: Tuesday, December 10, 2024
  • Listing Date on BSE and NSE: Wednesday, December 11, 2024

Book Running Lead Managers

The Suraksha Diagnostic IPO is being managed by the following Book Running Lead Managers (BRLMs):

  • ICICI Securities Limited
  • SBI Capital Markets Limited
  • Nuvama Wealth Management Limited

The registrar for the IPO is KFin Technologies Limited, responsible for processing applications and managing allotments.

Promoters Information

Here is the promoter and key management information for the Suraksha Diagnostic IPO:

  • Dr. Somnath Chatterjee: Chairman and Joint Managing Director of Suraksha Diagnostic Limited. He is a medical graduate from the University of Calcutta (1985) with over 32 years of experience in the medical and diagnostics industry. Dr. Chatterjee has been associated with the company since its inception and is responsible for overall planning and business strategies.
  • Ritu Mittal: Joint Managing Director and CEO. A commerce graduate from the University of Calcutta (1996), she has over 28 years of experience in the medical and diagnostics sector, including her association with Suraksha Diagnostic & Eye Centre Private Limited. She oversees the company’s operations end-to-end.
  • Satish Kumar Verma: Non-Executive, Non-Independent Director. He is a mechanical engineering graduate from Punjabi University (1969) with a postgraduate diploma (1971). With over 40 years of management experience, he also serves as a director at Kanika Audio Visuals Private Limited and oversees strategic planning and customer relationship management.
  • Institutional Investors: The IPO includes the sale of equity by various stakeholders, including Orbimed Asia II Mauritius Limited, which acts as a key investor selling shareholder. The total offer includes shares from promoter shareholders and other individual shareholders as part of the Offer for Sale​

About Suraksha Diagnostics Ltd.

Suraksha Diagnostics Limited, the largest integrated diagnostics chain headquartered in East India, provides a comprehensive range of services that include pathology and radiology testing, as well as medical consultation services. As of March 31, 2024, the company operates 48 diagnostic centers and 146 sample collection centers across West Bengal, Assam, Bihar, and Meghalaya, making it a leader in its region.

The company boasts a technologically advanced infrastructure with a central reference laboratory, eight satellite laboratories, and 215 customer touchpoints, including 49 diagnostic centers and 166 sample collection centers. Its offerings include over 2,300 tests, ranging from routine pathology (788 tests) to specialized pathology (647 tests), and basic/intermediate radiology (748 tests) such as X-rays, CT scans, MRIs, and ultrasounds. Additionally, it supports its operations with robust systems like Laboratory Information Management System (LIMS), Radiology Information System (RIS), Picture Archive Communication System (PACS), and Enterprise Resource Planning (ERP) tools, ensuring efficiency and quality.

The company places a strong emphasis on quality certifications. Three laboratories hold NABL certification, and two advanced diagnostic centers are accredited by the National Accreditation Board for Hospitals & Healthcare Providers (NABH). Its high brand recall, superior service quality, and strong management team further enhance its reputation.

Suraksha Diagnostics derives most of its revenue (94% in Fiscal 2024) from the B2C segment, reflecting its dominant consumer reach. It also offers online and offline medical consultations through 44 diagnostic centers, which house 120 polyclinics with over 750 doctors.

According to a CRISIL report, India’s diagnostic service market is expected to grow at a CAGR of 10%-12%, reaching ₹1,375 billion by Fiscal 2028 from ₹870 billion in Fiscal 2024. This presents a significant growth opportunity for Suraksha Diagnostics to expand its footprint.

Key Strengths:

  • Largest diagnostic chain with a stronghold in East India.
  • Proven track record of profitability and consistent financial performance.
  • Comprehensive, one-stop solution for diagnostics combining pathology, radiology, and consultations.
  • Utilization of advanced technology platforms for operational excellence.
  • Strong brand positioning and quality-focused services since its inception in 2005.

Suraksha Diagnostics’ robust network, quality services, and market leadership position it to capitalize on the growing demand for diagnostic services in India.

Suraksha Diagnostics faces several challenges that could impact its operations and market position. Its heavy reliance on West Bengal makes the company vulnerable to regional disruptions, potentially affecting business continuity. Health epidemics pose a dual threat by affecting both workforce availability and service delivery. The risk of sample handling errors could compromise diagnostic accuracy and damage its reputation. Moreover, franchisee non-performance may negatively influence service quality and financial outcomes.

The company’s dependence on third-party vendors for critical diagnostic equipment introduces the possibility of supply chain disruptions, hindering operations. Additionally, failure to adopt new technologies could result in losing competitiveness and market share in the rapidly evolving diagnostics industry. These factors collectively highlight the importance of effective risk management strategies to sustain and grow its market position.

Financial Highlights

INR in Crores31-Mar-2431-Mar-2331-Mar-22
Revenue from Operation (in ₹ Cr.)218.71190.13223.19
Profit After Tax (PAT) (in ₹ Cr.)23.1276.06520.824
Total Borrowings (in ₹ Cr.)8.63714.00719.027
Net Worth (in ₹ Cr.)179.41155.93145.84
Return on Capital Employed (%)21.469.0523.11
Return on Equity (%)14.094.3215.38
Earnings Per Share (EPS)-in
absolute ₹		4.431.223.91
KPI’s as on 31-Mar-24Value
ROCE21.46%
Debt/Equity0.2
RoNW14.09%
P/BV13.1
PAT Margin (%)10.57
ROE14.09%

IPO Objectives

The proceeds from the Suraksha Diagnostic IPO will not be allocated to operational expansion or growth initiatives. Instead, the offering is structured as an offer-for-sale (OFS), enabling existing shareholders to divest their stakes and exit their investments. The company itself will not receive any funds from the IPO. This approach primarily aims to provide liquidity to the selling shareholders while facilitating the listing of the company’s shares on the stock exchanges.

NTPC Green Energy IPO
NTPC Green Energy IPO: Should You Apply or Avoid?

NTPC Green Energy IPO is a book-built issue of Rs 10,000.00 crores. The issue is entirely a fresh issue of 92.59 crore shares.

About NTPC Green Energy Limited

Incorporated in April 2022, NTPC Green Energy Limited is a wholly-owned subsidiary of NTPC Limited. NTPC Green is a renewable energy company that focuses on undertaking projects through organic and inorganic routes. The largest renewable energy public sector enterprise, NTPC (National Thermal Power Corporation Limited), was incorporated on November 7, 1975. The company’s renewable energy portfolio includes solar and wind power, making it easier to generate clean energy. Additionally, the company aims to develop utility-scale renewable energy projects and projects for public sector undertakings (“PSUs”) and Indian corporations. As of June 30, 2024, the company has an energy capacity of 14,696 MW, consisting of 2,925 MW from operating projects and 11,771 MW from contracted and awarded projects. Compared to its peers, NTPC has achieved higher EBITDA margins and PTA margins in the last 2 years.  The company is constructing 31 renewable energy projects in 7 states, totaling 11,771 MW. As of June 30, 2024, the workforce comprised 234 employees, and the company utilised the services of 45 contract labourers.

IPO Subscription Period

  • Open Date: November 19, 2024
  • Close Date: November 22, 2024
  • Allotment Date: November 25, 2024
  • Listing Date: November 27, 2024
  • Stock Exchanges: BSE and NSE

Pricing Details    

  • Price Band: ₹102 – ₹108 per Share
  • Face Value: ₹10 per Share
  • Minimum Lot Size: 138 shares
  • Investment Requirement:
    • Retail Investors: Minimum ₹14,904 (138 shares)
    • Small Non-Institutional Investors (sNII): 14 lots (1932 shares) – ₹208,656
  • Big Non-Institutional Investors (bNII): 68 lots (9384 shares) – ₹1,013,472

Reservation Structure

  • Qualified Institutional Buyers (QIB): 26.37% (24,44,44,445 shares)
  • Non-Institutional Investors (NII): 13.19% (12,22,22,222 shares)
    • Big NII (bNII): 8.79%
    • Small NII (sNII): 4.4%
  • Retail Investors: 8.79% (8,14,81,481 shares)
  • Anchor Investors: 39.56% (36,66,66,666 shares) raising ₹3960 crores

Key Dates and Timeline

  • IPO Open Date: Thursday, November 19, 2024
  • IPO Close Date: Monday, November 22, 2024
  • Basis of Allotment: Tuesday, November 25, 2024
  • Initiation of Refunds: Wednesday, November 26, 2024
  • Credit of Shares to Demat: Wednesday, November 26, 2024
  • Listing Date: Thursday, November 27, 2024
  • Cut-off time for UPI mandate confirmation: 5 PM on November 22, 2024

Book Running Lead Managers

Niva Bupa Health Insurance Limited has appointed prominent financial institutions as book-running lead managers for the IPO:

  • IDBI Capital Market Services Limited
  • IIFL Securities Limited
  • HDFC Bank Limited
  • Nuvama Wealth Management Limited

Kfin Technologies Limited has been designated as the registrar for the IPO.

Promoter Information

  • Promoter: The Promoters of the Company are the President of India, acting through the Ministry of Power, Government of India and NTPC Limited.
  • Shareholding:
    • Pre-Issue: 100%
    • Post-Issue: 89.01%

Financial Highlights

  • Revenue Growth: Increased by 11 folds from ₹170 crores (FY 2023) to ₹2037.66 crores (FY 2024)
  • Profit After Tax (PAT): Rose by 100%, reaching ₹344.72 crores in FY 2024
  • Net Worth: ₹6232 crores
  • Total Borrowing: ₹12796 crores

Key Performance Indicators (KPIs):

  • ROE: 7.39%
  • RoNW: 2.14%
  • P/BV: 9.89
  • EPS (Pre-IPO): ₹0.46
  • EPS (Post-IPO): ₹0.42
  • P/E Ratio (Pre-IPO): 234.97x
  • P/E Ratio (Post-IPO): 259.56x

IPO Objectives

The company proposes to utilise the Net Proceeds towards funding the following objects:

  • Investment in the wholly owned Subsidiary, NTPC Renewable Energy Limited (NREL), for repayment/ prepayment, in full or in part of certain outstanding borrowings availed by NREL
  • General corporate purpose

Subscription Status (As of November 19, 2024, 7:02:07 PM)

  • Retail: 1.47x
  • QIB: 0.00x
  • NII: 0.17x
  • Overall Subscription: 0.36x
Garuda Construction and Engineering IPO: Everything You Need to Know

Garuda Construction and Engineering Limited is opening its doors to public investment with an IPO worth ₹264.10 crores. This offering consists of a fresh issue of 1.83 crore shares aggregating ₹173.85 crores and an offer for sale of 0.95 crore shares worth ₹90.25 crores. Mark your calendars—this IPO is open for subscription from October 8, 2024, to October 10, 2024, with the tentative listing date on BSE and NSE set for October 15, 2024.

Key Dates to Remember:

  • IPO Open Date: October 8, 2024
  • IPO Close Date: October 10, 2024
  • Allotment Finalization: October 11, 2024
  • Listing Date: October 15, 2024

Price Band and Lot Size: The IPO price is set at ₹92-₹95 per share, with a minimum lot size of 157 shares. Retail investors can start with an investment of ₹14,915. For high-net-worth investors (HNIs), the minimum investment goes up to ₹208,810 for 14 lots.

Company Overview: Founded in 2010, Garuda Construction and Engineering Limited specializes in residential, commercial, industrial, and infrastructure projects. Their portfolio spans across residential/commercial buildings, infrastructure, and hospitality projects. The company’s focus on mechanical, electrical, and plumbing (MEP) services, as well as its expertise in project management, highlights its strong market positioning.

With a growing order book of ₹1,40,827.44 crore as of September 2024, Garuda is setting the stage for continued growth. Their projects spread across regions like MMR, Karnataka, and Rajasthan, showcasing their nationwide presence.

Financial Overview: Garuda has seen fluctuations in its financial performance, with revenue from operations recorded at ₹1,187.50 crores for the period ending April 30, 2024. Despite a slight decline in profit after tax from ₹40.8 crores in FY23 to ₹36.44 crores in FY24, the company’s robust order book and strong execution capabilities suggest long-term potential.

Key Performance Indicators (FY24):

  • ROE: 36.14%
  • ROCE: 46.69%
  • PAT Margin: 23.63%
  • Market Cap: ₹883.9 crores

IPO Objectives: The funds raised will primarily support:

  1. Working capital requirements
  2. General corporate expenses
  3. Potential inorganic acquisitions

Subscription Status: As of October 8, 2024 (Day 1), the IPO had been subscribed 0.68 times. The retail portion saw strong interest with a subscription of 1.25 times, while the QIB category is yet to attract bids.

Should You Invest? While Garuda boasts a strong portfolio and a promising pipeline of projects, some concerns linger regarding its financial volatility. Their previous IPO attempt by a group company, PKH Ventures, was withdrawn due to a tepid market response. Dilip Davda, a market expert, advises caution with this IPO, categorizing it as a “High Risk/Low Return” opportunity due to aggressive pricing.

Final Thoughts: Garuda Construction and Engineering presents an exciting opportunity for investors seeking exposure to the construction sector. With a well-established presence in the market and a robust order pipeline, the company is set for growth. However, the cautious financial outlook and pricing concerns should be weighed carefully before investing.

Garuda Construction and Engineering IPO Review (Avoid)
Dilip Davda recommends avoiding this IPO due to the company’s inconsistent financial performance and high trade receivables compared to revenue. A related group company, PKH Ventures, withdrew its IPO in 2023 due to poor market response. Despite holding over ₹1,400 crore in orders, the issue is aggressively priced based on FY25 earnings, making it a high-risk, low-return investment.