Beezaasan Explotech, a company with 60 years of legacy in manufacturing explosives, has recently launched its IPO to raise ₹59.93 Crores, offering 34.24 lakh shares. As one of India’s few companies excelling in explosives manufacturing, Beezaasan Explotech has a significant history of meeting the mining and industry demands with high-quality products and services. The subscription period for the IPO runs from February 21, 2025 to February 25, 2025, with a tentative listing date set for March 3, 2025 on the BSE SME.

The share price range for the IPO is set between ₹165 to ₹175 per equity share, making it an attractive investment option for potential investors. The lot size is 800 shares, and the minimum investment for retail investors stands at ₹1,40,000. High-Net-Worth Individuals (HNIs) are required to invest a minimum of ₹2,80,000. With a market capitalization of ₹227.15 Crores at the upper price band of ₹175, the company aims to raise funds for expanding its manufacturing facilities and repaying borrowings.

The Grey Market Premium (GMP) for Beezaasan Explotech IPO is currently expected to be ₹0, signaling neutral market sentiments due to the company’s financial performance and market conditions. The IPO is managed by SMART Horizon Capital Advisors Private Limited, with KFIN Technologies Limited as the registrar, ensuring that the process is smooth and transparent.

Subscription Status: As of February 21, 2025, at 05:00 PM, the IPO has been subscribed 0.40 times on its first day. The live status updates can be accessed on the BSE website, where investors can track the current subscription numbers.

Beezaasan Explotech IPO has attracted Anchor Investors, raising ₹16.94 Crores at ₹175 per share, further solidifying the company’s prospects. This move signifies strong institutional backing, which might provide positive signals for investors. The allotment for the IPO is expected to be finalized by February 27, 2025, and those interested can easily check their allotment status by visiting the Registrar's website and submitting the required details such as application number or PAN.

Key Objectives of the IPO:

1. Funding Capital Expenditure for Expansion: A significant portion of the funds will be directed towards the civil construction and machinery purchases required for expanding the existing manufacturing unit at Bhanthala, Mahisagar, Gujarat. This will enhance production capacity for Emulsion Explosives and Detonating Fuse.

2. Repayment of Borrowings: Another portion of the funds will be used to repay or prepay certain borrowings taken by the company, improving financial stability and reducing liabilities.

3. Commercial Vehicle Purchase: Part of the funds will also go towards the purchase of new commercial vehicles to support transportation needs within the business operations.

The company’s promoters, including Mr. Navneetkumar Radheshyam Somani, Mr. Sunilkumar Radheshyam Somani, and Mr. Rajan Sunilkumar Somani, possess extensive industry experience, having managed and grown the business for over 17 years. Their deep knowledge and expertise have contributed significantly to the company’s steady growth.

In terms of financial performance, Beezaasan Explotech has demonstrated consistent revenue growth and profitability, with revenue of ₹10,144.44 Lakh for the period ending September 30, 2024, and a Profit After Tax (PAT) of ₹832.86 Lakh. This shows positive growth compared to previous years, reflecting the company’s operational efficiency and business potential. The Pre-issue EPS stands at ₹6.04, with a Post-issue EPS of ₹3.75 for FY24.

Despite the attractive pricing and expansion plans, the Grey Market Premium (GMP) of ₹0 reflects a cautious sentiment in the market. The PE ratio of 28.97x (pre-issue) compared to the industry average of 90x suggests that the IPO is fairly priced, though it may not yield immediate listing gains.

Conclusion:

Given the company’s strong legacy, steady financial growth, and strategic expansion plans, Beezaasan Explotech IPO presents a promising opportunity for long-term investors. However, with neutral GMP and neutral market sentiment, prospective investors are advised to approach this IPO with caution if seeking short-term listing gains. The valuation is reasonable in comparison to industry standards, making this a potentially stable investment for those willing to hold the shares for a longer term.

In summary, Beezaasan Explotech stands as a well-established player in the explosive manufacturing industry with ambitious expansion goals. The IPO provides a glimpse into the company’s growth trajectory, but investors should carefully assess their risk appetite before making investment decisions.

The Upcoming IPOs in this week and coming weeks are Nukleus Office, Shreenath Paper.

The Current active IPO are Beezaasan Explotech, Swasth Foodtech, HP Telecom India.

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