The Abha Power and Steel IPO is set to open on November 27, 2024, and close on November 29, 2024. The issue size totals ₹38.54 Crores, comprising Fresh Issue of 41.39 Lakh shares worth ₹31.04 Crores, and an Offer for Sale (OFS) of 10 Lakh shares, amounting to ₹7.5 Crores. The share price has been set at ₹75 per equity share, and the Market Capitalisation of the company at the IPO price will be ₹100.86 Crores. The lot size for the IPO is 1,600 shares, with a minimum investment of ₹1,20,000 for retail investors and ₹2,40,000 for High-Net-Worth Individuals (HNIs).

The Abha Power and Steel company has 20 years of experience in the foundry industry, serving a wide array of sectors including Indian Railways, steel, cement, mining, heavy engineering, and power. It offers a range of both standard and customized products with a strong emphasis on quality, safety, and value competitiveness. The company has built a strong customer base both domestically and internationally, with clients in countries like UAE, Qatar, Germany, Canada, Italy, Netherlands, and Nepal.

For the fiscal years 2024, 2023, and 2022, Abha Power and Steel posted revenues of ₹5,182.68 lakh, ₹5,511.82 lakh, and ₹5,498.40 lakh, respectively. The EBITDA for the same periods was ₹822.18 lakh, ₹375.79 lakh, and ₹211.11 lakh, respectively. The Profit after Tax (PAT) in FY24 was ₹378.19 lakh, an improvement from ₹-71.53 lakh in FY22. The company’s strong EBITDA growth and positive PAT signal a recovery from previous losses.

The Upcoming IPOs in this week and coming weeks are Property Share REIT, Rosmerta Digital, Avanse Financial and Nisus Finance.

The Current active IPO is Ganesh Infraworld, Suraksha Diagnostic, Agarwal Toughened, Apex Ecotech, Abha Power and Steel.

The Abha Power and Steel IPO is issued at a pre-issue EPS of ₹2.62 and post-issue EPS of ₹2.03, with a pre-issue P/E ratio of 28.63x and a post-issue P/E ratio of 36.86x. These valuations are higher than the industry P/E ratio of 26.65x, indicating that the IPO is fully priced. The company also reports a Return on Capital Employed (ROCE) of 23.64% and Return on Equity (RoE) of 24.17% for FY24, which are relatively strong.

Despite these positive financials, the Grey Market Premium (GMP) for the Abha Power and Steel IPO is reported as ₹0, signaling no expected premium at listing. This suggests that the IPO may not offer significant listing gains and is unlikely to see strong demand in the grey market. Given the company's solid financial recovery and high P/E ratio, potential investors should be cautious, especially if their focus is on short-term profits or listing gains.

Investment Advice: Based on the company’s valuation metrics and the absence of GMP, the Abha Power and Steel IPO is fully priced. Investors seeking short-term gains or long-term growth may want to avoid this IPO due to the high P/E ratio and limited potential for immediate returns. However, for those interested in the foundry sector and willing to take on some risk, this IPO may present a long-term investment opportunity if the company can sustain its recent financial recovery.

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