The BikeWo Green Tech IPO is set to open for subscription from September 20, 2024, to September 24, 2024. This Book Built Issue aims to raise ₹24.09 crores, offering 38.86 lakh shares to investors. The shares are priced between ₹59 to ₹62 per equity share, with a minimum lot size of 2,000 shares. For retail investors, this translates to a minimum investment of ₹124,000, while High-Net-Worth Individuals (HNIs) must invest a minimum of ₹248,000 for 4,000 shares. The allotment of shares is expected to be finalized by September 25, 2024, with a tentative listing on the NSE SME planned for September 27, 2024.

The book-running lead manager for the IPO is Khandwala Securities Limited, while Bigshare Services Private Limited will manage the allotment process. Aftertrade Broking Private Limited serves as the sole market maker for this offering.

Financial Overview

BikeWo Green Tech operates primarily in the electric two-wheeler sector in India. The company began its journey in the automobile market by dealing in used four-wheelers from authorized dealers of various reputable automobile brands. As part of its expansion, BikeWo is now focusing on electric two-wheelers, aligning with the growing demand for sustainable transportation solutions.

Financially, BikeWo has demonstrated consistent growth:

Revenues from operations for the last three fiscal years were ₹2,514.21 lakhs in FY 2024, ₹2,061.86 lakhs in FY 2023, and ₹1,391.71 lakhs in FY 2022.

EBITDA figures for the same period show an increase to ₹282.29 lakhs in FY 2024 from ₹67.14 lakhs in FY 2023 and ₹100.38 lakhs in FY 2022.

The profit after tax (PAT) reached ₹167.21 lakhs in FY 2024, a significant rise from ₹9.80 lakhs in FY 2023 and ₹15.19 lakhs in FY 2022.

For the IPO, the company presents a pre-issue EPS of ₹2.51 and a post-issue EPS of ₹1.28. The pre-issue P/E ratio stands at 24.70x, while the post-issue P/E ratio escalates to 48.43x. The return on capital employed (ROCE) for FY 2024 is 10.87%, and the return on equity (ROE) is 13.94%, indicating that the company is fairly priced based on these metrics.

Grey Market Premium and Subscription Status

As of today, the Grey Market Premium (GMP) for the BikeWo IPO is expected to range from ₹5 to ₹10, indicating a possible 5% to 10% listing gain. However, potential investors should approach the GMP cautiously, as it is based on speculative trading conditions in the unorganized market.

The IPO’s subscription status will be available for real-time updates starting September 20, 2024. Investors will be able to check the allotment status online on the registrar's website once the allotment is finalized.

Objectives of the IPO

The proceeds from the BikeWo Green Tech IPO will be utilized for several critical objectives:

₹600.00 lakhs for the purchase of electric two-wheeler vehicles to enhance supply for both new and existing dealerships.

₹623.38 lakhs for capital expenditures aimed at establishing eleven new dealership stores across various states in India.

₹350.00 lakhs for the prepayment or repayment of outstanding borrowings.

General corporate purposes to facilitate overall growth.

Conclusion and Expert Opinion

While BikeWo Green Tech is stepping into the growing electric vehicle market, the current pre-issue P/E ratio suggests that the stock may be overpriced post-issue. Industry experts recommend that investors exercise caution and consider the potential risks involved. With the company's significant growth in revenue and profit, it remains crucial to evaluate whether the valuation justifies the investment for either listing gains or long-term prospects.

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