BikeWo Green Tech Limited, a leading electric two-wheeler retailer in India, is launching its Initial Public Offering (IPO) on September 20, 2024, with an aim to raise ₹24.09 crores through a book-built issue. The subscription period closes on September 24, 2024. The IPO consists of a fresh issue of 38.86 lakh shares, offering investors a unique opportunity to enter the rapidly expanding electric vehicle (EV) market in India.

The share price band for the BikeWo Green Tech IPO is set between ₹59 to ₹62 per share, with a minimum lot size of 2,000 shares. For retail investors, this translates to a minimum investment of ₹124,000. High-Net-Worth Individuals (HNIs) are required to invest in at least two lots (₹248,000). The company plans to list on the NSE SME Exchange on September 27, 2024.

BikeWo Green Tech's Journey

Since its incorporation, BikeWo Green Tech has operated in both the electric two-wheeler market and the used car dealership business. Initially, the company focused on buying and selling pre-owned four-wheelers sourced from authorized new car dealers. However, the rise of electric mobility in India has prompted the company to expand into the electric vehicle (EV) retail space. Today, BikeWo stands as a significant player in the EV retail market, offering environmentally friendly and affordable electric two-wheelers.

The funds raised through the IPO will be used to expand BikeWo's operations, including:

₹600.00 lakhs allocated towards purchasing electric two-wheelers for distribution to dealers.

₹623.38 lakhs to fund the establishment of eleven dealership stores across various states in India.

₹350.00 lakhs for prepayment or repayment of outstanding loans.

A portion will also be used for general corporate purposes.

BikeWo Green Tech's Financial Performance

The financial trajectory of BikeWo Green Tech has been solid. The company reported revenues of ₹2,514.21 lakhs in FY24, an increase from ₹2,061.86 lakhs in FY23 and ₹1,391.71 lakhs in FY22. Similarly, EBITDA has improved significantly, from ₹67.14 lakhs in FY23 to ₹282.29 lakhs in FY24. However, profit after tax remains relatively modest, increasing from ₹9.80 lakhs in FY23 to ₹167.21 lakhs in FY24.

While these numbers indicate growth, the pre-issue EPS of ₹2.51 and post-issue EPS of ₹1.28 imply that the IPO is priced on the higher side, with a pre-issue P/E ratio of 24.70x and a post-issue P/E ratio of 48.43x. Investors should consider these metrics carefully, as they suggest limited immediate upside, particularly for those seeking short-term listing gains.

Grey Market Premium (GMP) and Market Sentiment

As of now, the Grey Market Premium (GMP) for the BikeWo Green Tech IPO is expected to be in the range of ₹5 to ₹10 per share. While the GMP provides an indication of potential listing gains, it is important to note that these figures are based on informal, unregulated markets and should not be solely relied upon for investment decisions. No formal price discovery can occur until the stock is listed on the NSE SME.

Subscription Details and Allotment

As of 5:00 PM on September 20, 2024, the IPO has been subscribed 1.15 times on its first day. Retail investors and Qualified Institutional Buyers (QIBs) have shown interest, but the level of subscription will become clearer as the subscription period progresses.

The allotment date for the BikeWo Green Tech IPO is September 25, 2024, and investors can check the allotment status through the BikeWo IPO allotment status page by entering their application number, PAN, or DP Client ID.

Is BikeWo Green Tech IPO Worth Investing?

While BikeWo Green Tech has demonstrated consistent revenue growth, the high valuation and relatively modest Grey Market Premium make it a cautious investment for those looking for quick gains. Investors with a long-term horizon may find this IPO more attractive, given the company's expansion into the booming electric vehicle market and the anticipated rise in demand for green mobility solutions. However, short-term investors looking for substantial listing gains should approach this IPO carefully.

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