Identical Brains Studios is an emerging player in the VFX (Visual Effects) industry, offering a comprehensive suite of VFX services for films, web series, TV series, documentaries, and commercials. With a customer base that includes major Bollywood studios, the company transforms creative ideas into visually stunning realities. Currently operating out of India, Identical Brains Studios is rapidly gaining recognition for its cutting-edge technology and proprietary workflow processes, which ensure high-quality results in every project.

The Identical Brains Studios IPO will open on December 18, 2024, and close on December 20, 2024. The company aims to raise ₹19.95 crores through a fresh issue of 36.94 lakh shares. The allotment of shares is expected to be finalized by December 23, 2024, and the shares will be listed on the NSE SME platform, with the tentative listing date scheduled for December 26, 2024.

IPO Price Band and Investment Details

The price band for the Identical Brains Studios IPO is set between ₹51 to ₹54 per equity share. With a market capitalization of ₹75.74 crores at the upper price band of ₹54 per share, the company is positioning itself as a solid option for investors. The lot size is 2,000 shares, meaning retail investors must invest a minimum of ₹1,08,000. For High-Net-Worth Individuals (HNIs), the minimum investment is 2 lots (4,000 shares), totaling ₹2,16,000.

Grey Market Premium (GMP) and Expected Listing Gains

The Grey Market Premium (GMP) for the Identical Brains Studios IPO currently stands at ₹4, indicating an expected listing gain of around 7.41%. However, it's important to remember that Grey Market Premium is unofficial and not reflective of the final listing price. It is driven by demand and supply in the unregulated market and can be volatile. As such, it is primarily for informational purposes and should not be relied upon for making investment decisions.

IPO Allotment Process

The allotment for the Identical Brains Studios IPO will be finalized on December 23, 2024. Investors can check the allotment status online by following these steps:

1. Visit the IPO allotment status page.
2. Select Identical Brains Studios IPO from the list of available IPOs.
3. Enter the required details such as application number, PAN, or DP Client ID.
4. Submit to view your allotment status.

This process ensures that investors can easily track their IPO allotment status.

Company Financials and Valuation

Identical Brains Studios has demonstrated strong financial growth, with revenues from operations rising from ₹390.75 lakh in FY2022 to ₹2,026.38 lakh in FY2023. For the period ending October 31, 2024, the company's EBITDA stood at ₹433.14 lakh, and the Profit after Tax (PAT) was ₹240.54 lakh. The pre-issue P/E ratio of 10.42x and the post-issue P/E ratio of 14.17x suggest that the IPO is priced at a reasonable valuation, slightly lower than the industry P/E of 15x.

With a Return on Capital Employed (ROCE) of 103.52% and Return on Equity (RoE) of 71.66% for FY24, the company shows strong profitability and efficient capital use.

Use of Proceeds

The proceeds from the fresh issue will be primarily used for the following purposes:

• ₹51.78 lakh for capital expenditure, including the renovation of the Andheri office and studio.

IPO Review and Recommendation

Given the company's solid financial performance, strong growth potential in the booming VFX sector, and competitive IPO pricing, Identical Brains Studios IPO presents a promising opportunity for investors. However, considering the low Grey Market Premium and relatively higher valuation, we recommend investors exercise caution and avoid the IPO if seeking short-term listing gains.

The Upcoming IPOs in this week and coming weeks are NACDAC Infrastructure, Transrail Lighting, Mamata Machinery, Identical Brain Studios, Rosmerta Digital, Indo Farm, DAM Capital and Avanse Financial.

The Current active IPO is and International Gemmological, Hamps Bio, Yash Highvoltage and Inventurus Knowledge.

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