Fabtech Cleanrooms Limited IPO is a significant offering for investors looking to enter the cleanroom technology and HVAC systems sector. With over two decades of leadership in delivering advanced turnkey pharmaceutical solutions, Fabtech Cleanrooms specializes in innovative systems tailored for various industries, including pharmaceuticals, biotech, hospitals, and electronics. Their extensive experience in clean-air technology has helped position them as a key player in the market.

The IPO is a Book Built Issue amounting to ₹27.74 Crores, consisting entirely of a fresh issue of 32.64 Lakh shares. The price band is set between ₹80 to ₹85 per share, and the market capitalization of Fabtech Cleanrooms at the upper price band of ₹85 is approximately ₹104.71 Crores. The lot size for this IPO is 1,600 shares, with retail investors required to invest a minimum of ₹1,36,000. High-Net-Worth Individuals (HNIs) must invest ₹2,72,000 (2 lots or 3,200 shares).

Business Overview

Fabtech Cleanrooms is a leader in providing HVAC systems and intelligent cleanroom solutions, ensuring high-quality standards for a variety of sectors. The company’s expertise spans cleanroom design, air filtration, and airflow systems, making it essential for industries that demand strict cleanliness and air purity. The company is expanding its footprint, driven by a strong reputation and deep technical knowledge in clean-air solutions.

Financial Performance

Fabtech Cleanrooms has shown steady growth in its revenues and profits:

• Revenues from operations for FY2024 amounted to ₹6,222.89 Lakh, showing a decline from the previous years but maintaining a positive growth trajectory.
• EBITDA for FY2024 is ₹754.41 Lakh, with a Profit After Tax (PAT) of ₹540.18 Lakh.
• The company has demonstrated resilience, with consistent performance over the past few years, even during challenging market conditions.

Valuation and Key Metrics

The pre-issue EPS is ₹6.92, and the post-issue EPS is expected to be ₹4.70 for FY24. The company’s pre-issue P/E ratio stands at 12.28x, while the post-issue P/E ratio increases to 18.10x, reflecting the potential dilution of equity. The industry P/E ratio for cleanroom technology firms typically hovers around 20x, indicating that the IPO is priced competitively. The company also reports an impressive ROCE of 15.83% and ROE of 11.96% for FY24.

Grey Market Premium (GMP)

As of January 4, 2025, the GMP for Fabtech Cleanrooms IPO is ₹65, signaling a potential 76.77% listing gain. However, investors should be cautious when considering GMP as it reflects unregulated market trading and should not be solely relied upon for making investment decisions.

IPO Subscription and Allotment Status

As of January 3, 2025, the Fabtech Cleanrooms IPO has been subscribed 18.46 times on its first day of subscription, indicating strong investor interest. The allotment date is set for January 8, 2025, and investors can check the allotment status by visiting the registrar’s website and entering their application number or PAN number.

Objectives of the IPO

Fabtech Cleanrooms aims to use the net proceeds from the IPO for the following purposes:

1. ₹1,400.00 Lakh for meeting long-term working capital requirements.
2. ₹550.00 Lakh for the proposed acquisition of equity shares in Kelvin Air Conditioning and Ventilation Systems Private Limited.
3. The remaining funds will be utilized for general corporate purposes.

Recommendation and Conclusion

Given the company’s solid track record, industry expertise, and the promising GMP of 76.77%, Fabtech Cleanrooms presents a compelling investment opportunity for those seeking exposure to the growing cleanroom and HVAC sector. The IPO valuation appears fair, with potential listing gains and a competitive edge in the clean-air technology space. We recommend that investors apply for Fabtech Cleanrooms IPO with an eye on listing gains.

The Upcoming IPOs in this week and coming weeks are Indobell Insulation, Standard Glass Lining, Quadrant Future, Capital Infra Trust, Delta Autocorp, Avax Apparels and B R Goyal.

The Current active IPO are   Fabtech Technologies, Davin Sons and Parmeshwar Metal.

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