The Rs 824-crore Craftsman Automation IPO will list on BSE and NSE on March 25, 2021. The challenge was sold in the price tag variety of Rs 1,488-1,490 per share amongst March 15-17, 2021. The initial public providing received a tepid response from investors with a 3.82 occasions subscription. In the grey market place on Wednesday, shares of this auto element maker had been trading at Rs 1,520 apiece, with a premium of Rs 30 or 2 per cent more than the challenge price tag, according to UnlistedArena.com, which tracks the grey market place.
Scrappage policy, electric automobiles, BS-VI to advantage Craftsman Automation
The company’s prime clientele contain Daimler India, Tata Motors, Tata Cummins, Mahindra & Mahindra, Simpson & Co. Limited, Escorts, Ashok Leyland, Perkins, Mitsubishi Heavy Industries, John Deere, JCB India. Royal Enfield, Perkins, amongst other people. Marwadi Shares and Finance Ltd told TheSpuzz Online that thinking of FY20 adjusted EPS of Rs 19.44 on a post-challenge basis, the firm is going to list at a P/E of 76.65X with a market place cap of Rs 3,148 crore. “Investors should hold this stock for the long-term to reap the benefits of BS-IV to BS-VI transformation, vehicle scrappage policy and electric vehicles introduction,” it added.
Should you book profit in Craftsman Automation on listing day?
On profitable listing on Dalal Street, Craftsman Automation will join listed sector peers such as Bharat Forge Ltd, Endurance Technologies Ltd, Jamna Auto Ltd, Mahindra CIE Automotive Ltd, Minda Industries Ltd, Sundram Fasteners Ltd and Ramkrishna Forgings Ltd. Craftsman Automation is providing its shares at wealthy valuations, though the future appears vibrant for the firm owing to the diversified clientele base, competitive edge, and the revival of the automotive sector going ahead, says Ranjit Jha, CEO, Rurash Financial. “We are not expecting a high listing gain from the IPO, if it is more than 10% from the issue price, one should take advantage of the situation and book the same,” Jha advised investors.
Craftsman Automation Ltd is a major engineering firm, which is engaged in the manufacturing of precision elements. The IPO is valued at 44x EPS for annualized FY21, respectively, which look to be reasonably priced. Given ongoing traction in automobile space and anticipated sharp recovery in OEMs’ volumes in FY22E, Craftsman Automation is anticipated to advantage immensely on account of its powerful associations with OEMs, says Vikas Jain, Senior Research Analyst at Reliance Securities. Further, wholesome money generation, much better OCF yield compared to peers, probably improvement in return ratio and comfy leverage positioning give comfort. “In our view, considering low asset turnover ratio, the company can sustain growth hereon without much capex, which should result in sizable cash flows. We would recommend holding the stock from long-term,” Jain stated.
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