Beezaasan Explotech Limited, a company with over 60 years of experience in manufacturing world-class explosives, has launched its IPO, which opens for subscription from February 21, 2025, to February 25, 2025. The IPO is a Book Built Issue worth ₹59.93 Crores, comprising an entirely fresh issue of 34.24 lakh shares. Investors will have the opportunity to subscribe to the shares at a price band of ₹165-₹175 per equity share.

The company specializes in industrial and mining explosives, leveraging its decades of expertise to meet customer demands. Over the years, it has developed innovative explosive products that cater to various industries. The listing of shares on BSE SME is expected to take place on March 3, 2025, with the allotment finalized by February 27, 2025.

IPO Details and Investment Requirements

The IPO lot size is set at 800 shares, making the minimum investment for retail investors ₹1,40,000. High-Net-Worth Individuals (HNIs) must purchase a minimum of two lots (1,600 shares), amounting to ₹2,80,000. The market capitalization of Beezaasan Explotech at the upper end of the price band (₹175 per share) will be ₹227.15 Crores.

The IPO is being managed by SMART HORIZON CAPITAL ADVISORS PRIVATE LIMITED, with KFIN TECHNOLOGIES LIMITED as the registrar. Rikhav Securities Limited is the Market Maker for the IPO.

Grey Market Premium (GMP) and Subscription Status

As of now, the Grey Market Premium (GMP) of Beezaasan Explotech IPO stands at ₹0, indicating no immediate premium on the issue price. The GMP depends on demand and supply factors in the unregulated market, which is why it should be considered for informational purposes only.

The live subscription status of the IPO as of 11:00 AM on February 25, 2025, shows a subscription rate of 0.93 times, indicating moderate investor interest on the final day.

Anchor Investors and Fund Allocation

Beezaasan Explotech secured ₹16.94 Crores from Anchor Investors at a fixed price of ₹175 per share. In consultation with the Book Running Lead Managers, the company allocated 9,68,000 equity shares to Anchor Investors.

Objectives of the IPO Fund Utilization

Beezaasan Explotech plans to utilize the net proceeds of the IPO towards the following objectives:

• ₹387.47 Lakhs for capital expenditure towards the expansion of its existing manufacturing unit at Bhanthala, Mahisagar, Gujarat.

• ₹2,304.30 Lakhs for the purchase of plant and machinery for expanding its Emulsion Explosive-3 Plant, Emulsion Bulk Explosive Plant, and Detonating Fuse Plant.

• ₹202.56 Lakhs for additional magazine (storage) facilities at Felsani, Gujarat.

• ₹144.40 Lakhs for the purchase of commercial vehicles.

• ₹1,800.00 Lakhs for repayment/prepayment of borrowings.

• General corporate purposes.

Financial Performance and IPO Valuation

Beezaasan Explotech has demonstrated steady financial growth over the years:

• Revenue from operations for FY2024 (till September 30, 2024): ₹10,144.44 Lakh.

• Full-year revenues for FY2024, FY2023, and FY2022: ₹18,789.64 Lakh, ₹22,917.41 Lakh, and ₹14,190.54 Lakh, respectively.

• EBITDA for FY2024 (till September 30, 2024): ₹1,416.03 Lakh.

• Profit after Tax (PAT) for FY2024 (till September 30, 2024): ₹832.86 Lakh.

Key financial indicators for FY2024:

• Pre-issue EPS: ₹6.04 | Post-issue EPS: ₹3.75.

• Pre-issue P/E Ratio: 28.97x | Post-issue P/E Ratio: 46.68x (compared to the industry P/E of 90x).

• ROCE: 16.20% | ROE: 25.93% | RoNW: 20.89%.

• Annualized EPS: ₹16.7 | PE Ratio: 10.47x.

IPO Review and Final Verdict

Given the financial performance and valuation metrics, the IPO appears to be fully priced. The Grey Market Premium (GMP) remains at zero, indicating low listing gains expectations. Investors looking for short-term gains may consider avoiding this IPO. However, those with long-term investment goals may find Beezaasan Explotech's steady revenue growth and expansion plans appealing.

Final Thoughts: Beezaasan Explotech Limited IPO presents an opportunity for investors in the explosives manufacturing sector. While its financial performance has been stable, the IPO valuation is on the higher side. Investors should assess their risk appetite before making a decision.

The Upcoming IPOs in this week and coming weeks are Balaji Phosphates.

The Current active IPO are Shreenath Paper, Nukleus Office, Beezaasan Explotech.

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