Emerald Tyre Manufacturers, established in 2002, has earned a strong reputation as a global supplier and solution provider in the industrial tyre sector. With a diverse range of products, the company is well-known for its reliable service, long-standing market presence, and customer-focused approach. As an emerging player in the tyre manufacturing industry, Emerald has built a strong foothold in the global market, providing end-to-end tyre-wheel solutions.

Subscription Details and Price Band

Emerald Tyre Manufacturers is raising ₹49.26 crores through its Book Built Issue IPO, consisting of a Fresh Issue of 49.86 lakh shares worth ₹47.36 crores and an Offer for Sale of 1.99 lakh shares totaling ₹1.89 crores. The IPO subscription period will begin on December 5, 2024, and close on December 9, 2024. The allotment date is expected to be on or around December 10, 2024, and the listing date on BSE SME is set for December 12, 2024. The price band has been set between ₹90 and ₹95 per share, with the market capitalization of the company at ₹185.02 crores at the upper price band of ₹95. The lot size is set at 1,200 shares, which means that retail investors will need to invest a minimum of ₹1,14,000 for one lot, and High-Net-Worth Individuals (HNIs) must apply for 2 lots (2,400 shares), totaling ₹2,28,000.

Financials and Objectives of the IPO

Emerald Tyre Manufacturers has seen impressive growth in recent years. For the period ending July 31, 2024, the company reported revenue from operations of ₹6,492.75 lakhs, and for the fiscal years 2024, 2023, and 2022, the numbers were ₹17,196.84 lakhs, ₹16,798.10 lakhs, and ₹13,469.67 lakhs, respectively. The consolidated EBITDA for the period ending July 31, 2024 was ₹1,081.42 lakhs, with a Profit After Tax (PAT) of ₹413.64 lakhs.

The funds raised from the IPO will be utilized for the following:

1. ₹40.85 crores for capital expenditure, aimed at expanding the company’s manufacturing capabilities.
2. General corporate purposes.
3. Offer expenses related to the IPO process.

Key Metrics and Valuation

The company is offering shares with a pre-issue EPS of ₹8.64 and a post-issue EPS of ₹6.23. The pre-issue P/E ratio stands at 11.00x, while the post-issue P/E ratio is 15.24x. These metrics suggest the IPO is reasonably priced. Furthermore, the company's ROCE for FY24 stands at 17.62%, and ROE for FY24 is 19.18%, indicating strong profitability.

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for the Emerald Tyre Manufacturers IPO is reported at ₹29, suggesting potential listing gains of 30%. While GMP provides an indication of market sentiment, it is important to note that it is speculative and should not be the sole factor in making investment decisions.

How to Check Allotment Status

To check the allotment status for the Emerald Tyre Manufacturers IPO, follow these steps:

1. Visit the registrar’s website and select Emerald Tyre Manufacturers Limited IPO from the dropdown list.
2. Enter your application number, PAN, or DP Client ID.
3. Submit the details to view your allotment status.

IPO Review and Investment Advice

Emerald Tyre Manufacturers operates in the industrial tyre manufacturing sector, which is poised for growth due to increased demand for high-performance tyres in various industries. The company’s strong market presence, growing global footprint, and robust financials make it an attractive option for investment, particularly for risk-seeking investors looking for listing gains.

However, as always, investors should carefully evaluate the financials, growth prospects, and market risks before committing. Given the positive GMP and affordable price band, risky investors may find this IPO appealing for potential short-term gains or long-term investment in a growing industry.

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