Chamunda Electricals Limited, a company providing specialized electrical services, is set to launch its IPO on February 4, 2025. The IPO will open for subscription and close on February 6, 2025, with an offer size of ₹14.60 Crores, consisting entirely of a fresh issue of 29.19 Lakh shares. The price band for the Chamunda Electricals IPO has been set at ₹47 to ₹50 per equity share.

This is a book-built issue, and the Market Capitalisation of Chamunda Electricals at the upper price band of ₹50 per share will be ₹55.02 Crores. The lot size is 3,000 shares, with retail investors required to invest a minimum of ₹1,50,000. High-net-worth individuals (HNIs) need to apply for a minimum of 2 lots (6,000 shares), totaling ₹3,00,000. The allotment date is expected to be February 7, 2025, and the shares will be listed on the NSE SME on February 11, 2025.

Key Objectives for IPO Funds

Chamunda Electricals aims to use the funds raised through the IPO for capital expenditure and working capital needs, among other objectives. Specifically, ₹120.51 Lakhs will be utilized to purchase new testing kits and equipment, ₹550 Lakhs will fund the company's working capital, and ₹285.07 Lakhs will be directed towards the repayment of term loans and cash credits. This shows the company’s focus on growth and expansion within the electrical services sector.

Financial Performance and Company Overview

Chamunda Electricals is engaged in the testing and commissioning of electrical substations up to 220 KV and has a solar power generation park of 1.5 MW. Their services include the erection of EHV-class equipment, control cable works, earthing, and maintenance of substations up to 66 KV.

The company has demonstrated steady financial growth, with revenues from operations showing an increase from ₹1,132.25 Lakhs in FY 2022 to ₹2,006.69 Lakhs in FY 2023. For the fiscal year ended December 31, 2024, the revenue stood at ₹1,842.57 Lakhs, with an EBITDA of ₹501.17 Lakhs. The Profit after Tax (PAT) for FY 2024 was ₹281.48 Lakhs, indicating strong profitability compared to previous years.

Key Metrics and Valuation

Chamunda Electricals IPO is being offered at an attractive pre-issue P/E ratio of 13.55x and a post-issue P/E ratio of 22.58x. The company’s return on equity (ROE) for FY 2024 is 52.43%, showcasing its potential for value creation. These metrics suggest that the IPO is fairly priced, making it an appealing option for investors seeking growth opportunities in the electrical services sector.

Grey Market Premium and Listing Expectations

The Grey Market Premium (GMP) for Chamunda Electricals IPO is ₹8, indicating a potential listing gain of 16%. However, it is important to note that grey market premiums are unregulated and should not be relied upon for investment decisions. This premium depends largely on the demand and supply dynamics in the unofficial market.

Subscription and Allotment Process

The IPO subscription will begin on February 4, 2025, and will close on February 6, 2025. The IPO's allotment status will be available on the registrar's website from February 7, 2025. Interested investors can check their allotment status by entering their application number, PAN, or DP Client ID on the registrar’s website.

Chamunda Electricals Promoters and Leadership

Chamunda Electricals is led by Chiragkumar Natvarlal Patel, who brings over 10 years of experience in the business, alongside Natvarbhai K Rathod, a veteran with 30 years in the Gujarat Electricity Board. The company also benefits from the leadership of Purnikaben C Patel, who oversees administrative operations. The promoters' combined experience in the electrical industry provides strong leadership to the company's growth trajectory.

Investment Recommendation

Given the financial strength, steady growth in revenues, and attractive valuation metrics, we recommend that risky investors consider applying to the Chamunda Electricals IPO. With the Grey Market Premium suggesting potential listing gains, this IPO could be a promising opportunity for those looking to enter the market.

The Upcoming IPOs in this week and coming weeks are Chamunda Electricals.

The Current active IPO are Malpani Pipes And Fittings and Dr. Agarwal's Health Care.

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