Beezaasan Explotech, a company with 60 years of industry experience in manufacturing world-class explosives, is set to launch its IPO. The company is known for its focus on safety and efficient services in the explosives sector, leveraging decades of experience in mining and industrial applications. The IPO will raise ₹ 59.93 Crores through a fresh issue of 34.24 lakh shares, aimed at expanding their existing manufacturing plants and reducing debt.

The subscription period for the Beezaasan Explotech IPO will begin on 21 February 2025 and end on 25 February 2025. The shares will be offered at a price band of ₹165 to ₹175 per equity share, with a lot size of 800 shares. Retail investors are required to invest a minimum of ₹1,40,000 (for one lot), and High-Net-Worth Individuals (HNIs) need to invest a minimum of ₹2,80,000 (for two lots).

The company plans to use the IPO proceeds for various capital expenditures:

1. ₹387.47 Lakhs for the civil construction required to expand the Emulsion Explosive-3 Plant and Emulsion Bulk Explosive Plant at their existing manufacturing unit in Bhanthala, Gujarat.
2. ₹2,304.30 Lakhs for purchasing machinery for the same expansion.
3. ₹202.56 Lakhs for additional storage facilities at Felsani, Gujarat.
4. ₹144.40 Lakhs for the purchase of commercial vehicles.
5. ₹1,800.00 Lakhs for the repayment of borrowings.
6. The remaining amount will be used for general corporate purposes.

As of 14 February 2025, the Grey Market Premium (GMP) for the IPO is ₹0, indicating no expected listing gain in the unregulated market. However, the actual market performance can vary once the shares are listed. The company has raised ₹16.94 Crores from anchor investors, allocating 9,68,000 equity shares at ₹ 175 per share. This shows the confidence institutional investors have in Beezaasan Explotech's future.

Beezaasan Explotech has shown consistent growth in its financials, with revenues reaching ₹ 10,144.44 Lakh for the period ending 30 September 2024, up from ₹ 18,789.64 Lakh in FY23 and ₹ 22,917.41 Lakh in FY22. The EBITDA for the same period was ₹ 1,416.03 Lakh, showing a solid profit margin. The Profit After Tax (PAT) for FY24 is ₹ 832.86 Lakh, indicating the company's capacity to generate earnings consistently.

The P/E ratio for the pre-issue period is 28.97x, and for post-issue, it rises to 46.68x, which is relatively high compared to the industry P/E ratio of 90x. These metrics suggest that the IPO is fully priced, but it is still below the industry's average valuation.

The IPO allotment is expected to be finalised by 27 February 2025, and investors can check their allotment status on the registrar's website. The shares are expected to be listed on the BSE SME platform on 3 March 2025.

While the IPO appears fully priced based on the company's financial performance, investors should be cautious about potential listing gains given the zero Grey Market Premium. The company's financial health, backed by solid revenues, EBITDA, and PAT, along with the use of IPO proceeds for expansion and debt repayment, presents a long-term investment opportunity. However, for those looking for short-term listing gains, the Beezaasan Explotech IPO may not be the most promising option.

In conclusion, investors interested in the explosives industry and looking for long-term growth opportunities could consider the Beezaasan Explotech IPO. However, caution is advised for those seeking immediate returns from listing gains.

The Upcoming IPOs in this week and coming weeks are Royalarc Electrodes Limited, Tejas Cargo India Limited, Quality Power Electrical Equipments.

The Current active IPO are  L.K. Mehta, Shanmuga Hospital, PS Raj Steels, Voler Car, Maxvolt Energy, Hexaware Technologies.

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