Danish Power Limited is celebrated as one of India's leading manufacturers and exporters of quality-conscious power equipment. The company’s commitment to building a sustainable legacy positions it well for future challenges. Danish Power strives to foster an organization that not only retains the necessary skills and expertise expected by its customers but also anticipates and meets emerging industry challenges.

The initial public offering (IPO) for Danish Power is a book-built issue amounting to ₹197.90 crores, entirely comprising a fresh issue of 52.08 lakh shares. The subscription period for the IPO opens on October 22, 2024, and concludes on October 24, 2024. Share allotment is expected to be finalized on or around October 25, 2024, with shares set to be listed on the NSE SME around October 29, 2024.

Price Band and Lot Size
The price band for the Danish Power IPO is set at ₹360 to ₹380 per equity share. The minimum lot size for this offering is 300 shares, which means retail investors must invest a minimum of ₹1,14,000. For High-Net-Worth Individuals (HNIs), the minimum investment is 2 lots (600 shares), equating to ₹2,28,000.

Lead Managers and Market Maker
HEM SECURITIES LIMITED is the book-running lead manager for the IPO, while Link Intime India Private Limited will serve as the registrar. Hem Finlease Private Limited will act as the Market Maker, facilitating post-listing trading of the shares.

Danish Power Limited IPO Grey Market Premium (GMP)
Currently, the Grey Market Premium (GMP) for the Danish Power IPO is expected to be ₹0, indicating no anticipated demand for the shares at this stage. It’s crucial to note that significant trading based on GMP is rare, and it should be viewed primarily as an educational reference rather than a reliable predictor of future performance.

Live Subscription Status and Allotment Process
The subscription for the Danish Power IPO will commence on October 22, 2024. Investors can monitor the live subscription status to assess demand for the offering. The allotment date is set for October 25, 2024. To check your allotment status online, follow these steps:

Navigate to the IPO allotment status page on the registrar's website.

Select Danish Power Limited IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the details to view your allotment status.

Objectives of the IPO
Proceeds from the fresh issue will be utilized for the following purposes:

₹3,699.47 lakhs for funding capital expenditure towards the expansion of the manufacturing facility by constructing a factory shed and installing additional plant and machinery.

₹8,500.00 lakhs will be allocated to meet working capital requirements.

₹2,000.00 lakhs will be used for the repayment of certain borrowings, either in part or in full.

Remaining funds will cater to general corporate purposes.

Financial Performance and Management Team
Danish Power has demonstrated impressive financial performance in recent years. For the fiscal year 2024, the company reported revenues from operations of ₹33,463.84 lakhs. The EBITDA for the same fiscal period stood at ₹5,371.14 lakhs, while the Profit after Tax (PAT) reached ₹3,807.27 lakhs.

The management team is led by Mr. Dinesh Talwar, the promoter with 39 years of industry experience, and Shivam Talwar, the Managing Director, who holds a Bachelor of Engineering with Honors in Electrical & Electronic Engineering and has around 17 years of experience in the transformer manufacturing sector. This experienced team is well-equipped to guide the company through the competitive landscape of power equipment manufacturing.

Valuation Metrics
For the Danish Power IPO, shares are being issued at a pre-issue EPS of ₹26.29 and a post-issue EPS of ₹19.33. The pre-issue P/E ratio is 14.45x, while the post-issue P/E ratio is 19.65x, against an industry P/E ratio of 48.14x. Additionally, the company boasts a ROCE of 56.98% and a RoE of 60.35% for FY24. These valuation metrics suggest that the IPO is reasonably priced within the current market context.

Final Review and Recommendation
Given the financial performance and the current GMP, indicating 0% potential listing gains, we recommend investors to avoid applying for the Danish Power Limited IPO for both listing gains and long-term investment purposes. The company’s future prospects may be contingent on broader market conditions and its ability to effectively leverage growth opportunities in the power equipment sector.

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