HP Telecom India Limited (HPTL), established on March 26, 2011, has emerged as a key player in India's telecom sector. With a commitment to delivering exceptional telecommunications services, the company has become known for its professionalism, innovation, and customer-centric approach. As a private entity, HPTL has been dedicated to enhancing communication infrastructure across the country.

Key Financials of HP Telecom India IPO

The HP Telecom India IPO is set to raise ₹34.22 crores through the issue of 31.69 lakh fresh equity shares. Priced at ₹98 per share, the market capitalization of the company at the IPO price will be ₹116.76 crores. Retail investors are expected to invest a minimum of ₹1,17,600 (1,200 shares), while High-Net-Worth Individuals (HNIs) must invest a minimum of ₹2,35,200 (2,400 shares). The lot size for the IPO is fixed at 1,200 shares.

The subscription period for the IPO opens on February 20, 2025, and closes on February 24, 2025. Following this, the allotment process is expected to be finalized by February 25, 2025, and the shares are slated for listing on the NSE SME on February 28, 2025. These timelines and pricing offer a significant window for retail investors, while institutional and HNI investors can also make their move with higher investments.

Grey Market Premium and Market Insights

The Grey Market Premium (GMP) of HP Telecom India is currently reported at ₹0, indicating a neutral market stance on the IPO. The GMP, an informal indicator of demand, has no official standing in the trading market, and any potential price discovery will only occur once the shares are listed on the stock exchange. Given the company's steady financial performance, the market's cautious approach may be reflected in this minimal premium.

IPO Allotment Process and Status Updates

The IPO allotment for HP Telecom India will be available on February 25, 2025. Investors can easily check their allotment status by following a simple process:

• Navigate to the IPO allotment page
• Select HP Telecom India from the dropdown
• Enter application details such as PAN, DP Client ID, or application number
• Submit the form to retrieve the allotment status

This allows investors to track their investments and finalize their next steps.

Use of Proceeds from the IPO

The net proceeds raised from the IPO will be allocated towards the following objectives:

• ₹3,000 lakh will be directed towards funding the company’s working capital requirements, ensuring smooth operations and financial growth.
• ₹350 lakh will be used for general corporate purposes, enabling HP Telecom India to expand its services and capabilities.

Financial Performance Review

HPTL's financial performance over the years has shown impressive growth. For the period ending September 30, 2024, the company's revenues from operations stood at ₹59,419.14 lakh, with a steady rise from ₹29,255.40 lakh in FY2022. The EBITDA for the period was ₹1,006.88 lakh, while the Profit after Tax (PAT) for the same period was ₹523.87 lakh.

In terms of valuation, the company maintains a pre-issue EPS of ₹13.48 and post-issue EPS of ₹7.22 for FY24. The P/E ratio pre-issue is 7.27x, which is much lower than the industry average of 49x, indicating that the IPO is attractively priced. Furthermore, the Return on Capital Employed (ROCE) and Return on Equity (ROE) for FY24 are robust, at 66.62% and 29.56%, respectively, showcasing strong profitability.

Conclusion: Avoid for Listing Gains

Despite the positive financial indicators, the Grey Market Premium for the HP Telecom India IPO stands at ₹0, reflecting limited demand in the informal market. Given this and the overall valuation, it is advisable for investors to approach the IPO with caution, particularly those hoping for quick listing gains. Instead, the IPO presents a long-term investment opportunity, especially for those interested in the growth trajectory of HP Telecom India in the rapidly expanding Indian telecommunications market.

The Upcoming IPOs in this week and coming weeks are Beezaasan Explotech, Nukleus Office.

The Current active IPO are Swasth Foodtech, HP Telecom India.

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