Identical Brains Studios is a leading provider of computer-generated visual effects (VFX) services, offering a comprehensive range of VFX solutions for films, web series, TV series, documentaries, and commercials. With operations based in India, the company serves top film and content producers, including major Bollywood studios, by transforming imaginative ideas and concepts into captivating visual realities.

The company is now moving forward with its Initial Public Offering (IPO) of ₹19.95 Crores, comprised entirely of a Fresh Issue of 36.94 Lakh Shares. The subscription period for the Identical Brains Studios IPO runs from December 18, 2024, to December 20, 2024. Allotment is expected to be finalized on December 23, 2024, with the shares to be listed on NSE SME on December 26, 2024.

IPO Details

The price band for the Identical Brains Studios IPO is set between ₹51 and ₹54 per equity share. At the upper price band of ₹54, the company's market capitalization will be ₹75.74 Crores. The IPO lot size is 2,000 shares, and retail investors are required to invest a minimum of ₹1,08,000, while High-Net-Worth Individuals (HNIs) must invest a minimum of ₹2,16,000 for 4,000 shares.

Socradamus Capital Private Limited serves as the book-running lead manager for the IPO, while Bigshare Services Private Limited acts as the registrar. Rikhav Securities Limited is the market maker for the Identical Brains Studios IPO.

Grey Market Premium (GMP) and Market Sentiment

The Grey Market Premium (GMP) for Identical Brains Studios stands at ₹28, indicating potential listing gains based on current market expectations. However, GMP does not guarantee future performance, and its value can vary depending on demand and supply dynamics, making it useful primarily for educational purposes.

Subscription Status and Anchor Investors

On the final day of the subscription period, December 20, 2024, the Identical Brains Studios IPO saw an impressive 506.09 times subscription, reflecting strong investor interest. The company raised ₹5.65 Crores through allocations to anchor investors, offering 10,48,000 equity shares at ₹54 per share. These figures highlight robust institutional interest in the IPO.

Financial Performance and Valuation

Identical Brains Studios reported significant revenue growth, with ₹1,139.49 Lakh in operational income as of September 30, 2024, and increases in EBITDA to ₹433.14 Lakh and Profit After Tax to ₹240.54 Lakh for the same period. Over the past three years, the company has shown strong growth, with FY24 showing continued upward momentum.

For the Identical Brains Studios IPO, the pre-issue Earnings Per Share (EPS) stands at ₹5.18, while the post-issue EPS is projected at ₹3.81. The pre-issue Price-to-Earnings (P/E) ratio is 10.42x, and post-issue it remains at 14.17x, compared to the industry average of 15x. This indicates a reasonable valuation given the company's performance metrics.

The company's Return on Capital Employed (ROCE) for FY24 is an impressive 103.52%, and Return on Equity (RoE) is 71.66%, underscoring its efficiency and profitability.

Investment Recommendation

Based on the strong subscription numbers, robust financial performance, and the reasonable valuation of Identical Brains Studios, we recommend the IPO to risky investors seeking potential listing gains. The company's strong foothold in the VFX industry and continued growth indicate long-term investment potential as well.

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