H.M. Electro Mech Limited, based in Ahmedabad, is a key player in infrastructure development, specializing in pumping machineries for water and wastewater projects, electrification projects for central and state governments, and diesel generator set installations for government and industry sectors. The company’s diverse portfolio includes instrumentation and civil works, making it a reliable partner for government-driven infrastructure projects.

The H.M. Electro Mech IPO is a Book Built Issue totaling ₹27.74 crores, consisting entirely of a fresh issue of 36.99 lakh shares. The price band for the IPO is set between ₹71 to ₹75 per share, with a market capitalization of ₹102.74 crores at the upper price band. The subscription period will run from January 24, 2025, to January 28, 2025, with the listing date scheduled for January 31, 2025.

Business Overview

H.M. Electro Mech is involved in critical infrastructure projects across water supply, wastewater treatment, pumping machinery installation, and diesel generator projects. The company’s expertise extends to electrification, civil works, and instrumentation, positioning it as a key player in executing large-scale government projects.

IPO Financial Highlights

• Price Band: ₹71 to ₹75 per equity share
• Market Capitalization: ₹102.74 crores at ₹75 per share
• Lot Size: 1,200 shares; Minimum Investment for Retail Investors: ₹1,20,000; HNIs: ₹2,40,000 (2 lots)
• Book Running Lead Manager: Beeline Capital Advisors Private Limited
• Registrar: Cameo Corporate Services Limited

Financial Performance

• Revenue from Operations (₹ Lakh): FY24 - ₹4,542.85; FY23 - ₹11,729.98
• EBITDA (₹ Lakh): FY24 - ₹549.08; FY23 - ₹1,282.41
• Profit After Tax (PAT) (₹ Lakh): FY24 - ₹333.89; FY23 - ₹818.61

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for the H.M. Electro Mech IPO is ₹16, or 21.33% at the upper end of the price band, indicating strong potential listing gains. However, GMP should be viewed cautiously as it reflects unregulated market trends and doesn't guarantee accurate pricing upon listing.

Subscription and Allotment Details

As of 11:40 AM on January 24, 2025, the IPO has been subscribed 2.51 times on its first day, reflecting strong investor interest. The IPO allotment date is January 29, 2025, and investors can check their allotment status online by following these steps:

1. Visit the IPO allotment status page.
2. Select H.M. Electro Mech Limited IPO from the dropdown.
3. Enter your application number, PAN, or DP Client ID.
4. Submit to check your allotment status.

IPO Objectives

The company intends to utilize the net proceeds for the following purposes:

1. ₹2,100 Lakhs for meeting working capital requirements.
2. General corporate purposes.

Company Leadership

The company is led by Mr. Mahendra Ramabhai Patel and Mr. Dipak Padmakant Pandya, who bring over 20 years of experience in managing large-scale electro-mechanical projects. Both promoters were previously associated with M/s. H M Engineers, a partnership firm focused on water supply and wastewater treatment. Their leadership and expertise ensure the company’s strong position in securing government contracts and executing large infrastructure projects.

Valuation and Conclusion

With a pre-issue P/E ratio of 9.16x and a post-issue P/E ratio of 12.55x, the IPO is reasonably priced when compared to the industry P/E ratio of 15x. The GMP of 21.33% suggests significant potential for listing gains. Given the company's solid financials, steady growth in revenue and profit, and attractive pricing, we recommend investors to apply for the H.M. Electro Mech IPO to benefit from the potential listing gains.

For more Real-time Updates, Bookmark https://financesaathi.com

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.

Join our Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates.