The H.M. Electro Mech IPO is a great opportunity for investors looking for listing gains, as the price band is set at ₹71 to ₹75 per share. This infrastructure company has been operational in various sectors, including pumping machineries for water and wastewater, electrification projects, and diesel generating sets projects for government, nationalized banks, and industries. With a clear focus on civil work, instrumentation, and more, H.M. Electro Mech has established a strong presence across diverse sectors.

The IPO consists of a fresh issue of 36.99 lakh shares, raising ₹27.74 crores. The subscription period for the H.M. Electro Mech IPO opens on January 24, 2025, and closes on January 28, 2025. Investors can apply for a minimum of 1,200 shares at a price band ranging from ₹71 to ₹75, with a market capitalization of ₹102.74 crores at the upper price band of ₹75. Retail investors need to make an investment of ₹1,20,000, while High-Net-Worth Individuals (HNIs) must invest a minimum of ₹2,40,000.

Key Financials and Performance

H.M. Electro Mech Limited has demonstrated steady growth, with revenues for the period ended September 30, 2024, standing at ₹4,542.85 lakh. The EBITDA for the same period was ₹549.08 lakh, and the profit after tax (PAT) reached ₹333.89 lakh. Over the last three fiscal years, the company has consistently improved its financial performance. This steady growth makes it an attractive investment option, as investors look for firms with strong fundamentals.

Anchor Investors and Grey Market Premium

As part of the IPO, H.M. Electro Mech raised ₹7.89 crores from anchor investors at the upper price band of ₹75 per share. This indicates strong confidence in the company’s prospects, particularly given the high grey market premium (GMP) of ₹16, which reflects a 21.33% potential gain upon listing. Although grey market premiums cannot be relied upon for price discovery, this is a strong indication of investor interest.

Purpose of the IPO

The net proceeds from the IPO will be used to meet the working capital requirements and for general corporate purposes. A substantial portion of the funds will ensure that the company remains agile in fulfilling its ongoing projects and future expansion plans.

The Team Behind the Success

The company's promoters, Mr. Mahendra Ramabhai Patel and Mr. Dipak Padmakant Pandya, bring over 20 years of experience in electro-mechanical contracting for water supply and wastewater treatment projects. Their expertise, along with a well-experienced team, has contributed significantly to the company’s success.

Investment Consideration

The pre-issue earnings per share (EPS) stands at ₹8.19, while the post-issue EPS is ₹5.98 for FY24. The P/E ratio is 9.16x pre-issue and 12.55x post-issue, which is lower compared to the industry average of 15x. This suggests that the company’s valuation is reasonable, making the IPO a good option for those seeking an opportunity to invest at an attractive price.

Given the company's growth trajectory, stable financial performance, and strong IPO backing, it is highly recommended to apply for the H.M. Electro Mech IPO if you're looking for potential listing gains.

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