Chamunda Electricals Limited is gearing up for its Initial Public Offering (IPO), which will open for subscription on February 4, 2025. The IPO is a book-built issue amounting to ₹14.60 Crores, entirely consisting of a fresh issue of 29.19 lakh shares. Investors will have the opportunity to subscribe to this issue at a price band of ₹47 to ₹50 per equity share, making it an appealing offering for those interested in the electrical infrastructure and renewable energy sectors.

Business Overview:

Chamunda Electricals is engaged in the specialized services of testing and commissioning of electrical substations up to 220 KV (kilovolt), alongside solar power generation parks with capacities of up to 1.5 MW (MegaWatts). Additionally, the company offers operation and maintenance services for substations up to 66 KV, and handles the erection of EHV class equipment, structures, and other key electrical works within its scope. The company plays a crucial role in the power transmission and renewable energy sectors, with a reputation for reliable and efficient services.

IPO Details and Structure:

The Chamunda Electricals IPO opens on February 4, 2025, and closes on February 6, 2025. The IPO's price band is set between ₹47 and ₹50 per equity share, and the lot size is 3,000 shares. Retail investors will be required to invest a minimum of ₹1,50,000, while High-Net-Worth Individuals (HNIs) must apply for at least 6,000 shares, which translates to ₹3,00,000. With a market capitalization of ₹55.02 Crores at the upper price band, this IPO provides investors an entry into a growing sector with solid demand.

The allotment date for the Chamunda Electricals IPO is set for February 7, 2025, and shares are expected to list on the NSE SME on or about February 11, 2025. Investors will have the opportunity to track the subscription status and ensure they are allotted their desired share quantity.

Grey Market Premium (GMP):

The Grey Market Premium (GMP) for Chamunda Electricals IPO is currently ₹8, indicating a 16% potential listing gain. While the GMP reflects investor sentiment, it is based on market speculation and should not be considered a reliable indicator of future listing performance. The GMP is purely for educational purposes, and investors should base their decisions on careful analysis and not speculative market trends.

Financial Performance:

Chamunda Electricals has shown steady financial growth, with revenues increasing from ₹1,132.25 Lakh in FY 2022 to ₹2,006.69 Lakh in FY 2023. For the period ending December 31, 2024, the company reported revenues of ₹1,842.57 Lakh. The company’s EBITDA has seen a notable increase, from ₹55.45 Lakh in FY 2022 to ₹501.17 Lakh in FY 2024. The Profit After Tax (PAT) has also improved significantly, reaching ₹281.48 Lakh in FY 2024, showcasing strong operational performance and profitability.

With an EPS of ₹3.69 (pre-issue) and a P/E ratio of 13.55x at the upper price band, the company is reasonably valued compared to industry standards. The ROE of 52.43% and ROCE of 36.82% indicate a highly efficient business with strong returns on equity and capital.

Use of IPO Proceeds:

The net proceeds from the IPO will be used for several strategic purposes:

1. ₹120.51 Lakhs for the purchase of new testing kits and equipment.
2. ₹550.00 Lakhs for working capital requirements.
3. ₹285.07 Lakhs for the repayment of term loans and cash credit.
4. The remaining funds will be utilized for general corporate purposes and to cover issue expenses.

Anchor Investors:

Chamunda Electricals has successfully raised ₹4.11 Crores from Anchor Investors at ₹50 per share. These institutional investors have shown confidence in the company's growth prospects, and the IPO allocation to these investors reflects the company’s credibility and appeal in the market.

IPO Subscription Status:

As the IPO subscription period opens on February 4, 2025, investors will be able to track the real-time subscription status, which reflects the demand and interest levels for the IPO. The higher the demand, the greater the likelihood of oversubscription, potentially leading to higher listing gains upon debut.

IPO Allotment Process:

To check the allotment status, investors can visit the registrar’s website (KFin Technologies Limited) and follow these simple steps:

• Select Chamunda Electricals Limited IPO from the dropdown list.
• Enter your application number, PAN, or DP Client ID.
• Submit the details to view the status of your allotment.

Chamunda Electricals IPO Review:

Chamunda Electricals’ IPO presents a fairly priced investment opportunity, especially for those interested in the power infrastructure and renewable energy sectors. The company's strong financials, steady growth, and solid market position in electrical testing and maintenance make this IPO a good option for listing gains. However, investors should be mindful of the premium valuation and the risks associated with investing in new public offerings.

The Upcoming IPOs in this week and coming weeks are Chamunda Electricals, Ken Enterprises, Amwill Healthcare, Readymix Construction, Eleganz Interiors.

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