The issue saw applications for 43,30,660 shares so far against the total size of 1,21,09,166 shares, meaning a subscription of 35 per cent. Retail and QIB investors were among those that applied to the issue.
Majority of analysts have given a subscribe rating to the issue. Reliance Securities has given the issue a thumbs up with a ‘Subscribe’ rating for a long-term perspective citing its strong outlook and steady cash flow.
“The IPO is valued at 35x of FY21 earnings, which appears to be at a discount of 17 per cent to its peers like Endurance Technologies. Working capital cycle, which stood at 79 days in FY21 and steady cash flow over the years offer comfort. Asset turnover ratio at 1.15x in FY21 indicates that the company can sustain higher growth with likely improvement in automobile volume in the subsequent years,” it added.
Echoing similar views, Choice Broking said that its business witnessed marked recovery from the impact of Covid-19 led complete lockdown in H1FY21. Brokerage has a subscribe rating on the issue.
In the financial year 2020-21, the company received about 65 per cent business from India, whereas the remaining portion came from Europe, the US and other countries. Investors can bid for a minimum of 20 shares each and in multiples of 20 shares thereafter. The issue can be subscribed till Thursday, September 16.
The company reported revenue at Rs 1,549.27 crore in FY21 compared to Rs 1,457.17 crore in FY20 and Rs 1,624.43 crore in FY19. Earnings before interest, tax, depreciation and amortization were Rs 272.12 crore in FY21 from Rs 224.7 crore in FY20 and Rs 289.09 crore in FY19. The EBITDA margin was 17.56 per cent in FY21.
Religare Broking has highlighted the high dependence on a few key customers and increase in the raw material prices as the key risks to the company. However, the brokerage has a positive view on the company, which it said is focusing on improving operating efficiencies.
