Auto element maker Craftsman Automation raised Rs 247 crore from anchor investors ahead of IPO, which will open for subscription on March 15. The company’s IPO committee in consultation with merchant bankers has decided to allocate a total of 16.58 lakh shares at Rs 1,490 to 21 anchor investors, according to a BSE circular. The anchor investors include things like HSBC Global Investment Funds, Tata Mutual Fund (MF), Aditya Birla Sunlife MF, The Nomura Trust and Banking Co Ltd, Max Life Insurance Co Ltd and Integrated Core Strategies Asia Pte Ltd.
Also study: Laxmi Organic IPO opens March 15, grey industry premium surges more than 70% need to you subscribe?
What’s driving IPO frenzy?
Along with the ongoing Anupam Rasayan, 5 IPOs are scheduled to open next week. These include things like Laxmi Organic Industries, Craftsman Automation, Rakesh Jhunjhunwala-backed Nazara Technologies, Suryoday Small Finance Bank and Kalyan Jewellers India. Analysts say the ongoing enthusiasm in principal markets by way of IPOs, FPOs and OFS is in harmony with the existing bull industry rally. “Retail investors are the most excited lot subscribing to these IPOs for listing gains and nearly 78% of total stock listings in FY21 have witnessed first-day gains, the highest in at least three years,” stated Nirali Shah, Head of Equity Research, Samco Securities.
Shah advised investors to stay cautious as through such occasions even poor-excellent concerns have a tendency to see thoughts-boggling subscriptions. “It is safer to judge on the basis of one’s own risk appetite and liquidity requirements before holding on to these companies for the long term,” she stated.
Should you subscribe to Craftsman Automation?
The public concern will be sold at a price tag band of Rs 1,488-1,490 per share. In the grey industry on Saturday, Craftsman Automation shares had been ruling at Rs 1,660, translating to a premium of Rs 170 or 11.4 per cent more than the concern price tag. Analysts at Canara Bank Securities have provided a ‘subscribe’ rating to the concern for a lengthy-term on the back of the company’s economic functionality and de-risked company model. “The company looks expensive in comparison to its peers in terms of P/E of 48.44x (annualized) and P/B of 4.19x for 9MFY21,” they stated.
Craftsman Automation is supplying items and options for more than 10 years, such as Tata Motors and Tata Cummins. Its important consumers include things like Daimler India, Tata Motors, Tata Cummins, Mahindra & Mahindra, Royal Enfield, Mitsubishi Heavy Industries, Siemens India, Escorts, Ashok Leyland, Simpson & Company, TAFE Motors and Tractors, Perkins India, John Deere and JCB India. Manthan Mehta, Head Unlisted & Private Equity Rurash Financial Services Pvt Ltd, told TheSpuzz Online, enterprise is commanding PE of 73x of FY20 EPS and 44x of FY21E EPS at the upper price tag band of Rs 1,490, which appears to be slightly overpriced. “However, one can apply for IPO gains,” he stated.
Those at LKP Securities have also provided ‘subscribe’ rating to this IPO, taking into consideration its visibility of best line development, competitive edge, superior profitability as compared to peers, prudent expense management, return ratios, wide clientele spread across the globe, sound R&D base and technological progress.
(The suggestions in this story are by the respective study and brokerage firm. TheSpuzz Online does not bear any duty for their investment tips. Please seek advice from your investment advisor prior to investing.)