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Identical Brains Studios IPO subscribed 58.09 times on Day 2. Check GMP and other details
Team Finance Saathi
19/Dec/2024
What's covered under the Article:
- Identical Brains Studios IPO offers ₹19.95 crore with a strong grey market premium and high subscription demand.
- The IPO's share price range is ₹51 to ₹54, with promising financial metrics and P/E ratios.
- Investors can apply through retail or HNI categories, with detailed steps for checking allotment status.
Identical Brains Studios, a well-established name in the VFX industry, is offering an Initial Public Offering (IPO) to raise ₹19.95 crores through the issuance of 36.94 lakh shares. With a share price range of ₹51 to ₹54, the IPO offers a promising opportunity for investors, especially given the strong grey market premium (GMP) and the impressive demand seen during the subscription period.
The Identical Brains Studios IPO is set to close on December 20, 2024, with allotments expected by December 23, 2024, and a tentative listing date on December 26, 2024. The company operates primarily in India and provides top-tier computer-generated visual effects (VFX) services across films, TV series, commercials, and documentaries. The operations of Identical Brains Studios have caught the attention of major Bollywood studios, further solidifying their position in the market.
Company Background and Market Potential: Under the leadership of Raghvendra Rai, a seasoned professional with over ten years of experience in the VFX industry, Identical Brains Studios has become a prominent player in the field. They offer a comprehensive suite of VFX services that are crucial for the entertainment industry, helping transform creative ideas into visual masterpieces. The company’s customer base includes top content producers from across the country, with a special focus on Bollywood.
The financial growth of the company has been impressive, with revenue growth from ₹390.75 lakh in FY 2022 to ₹1,139.49 lakh in FY 2024. The EBITDA has shown strong improvement, standing at ₹433.14 lakh for the period ending September 30, 2024. Similarly, the profit after tax (PAT) has risen significantly, with ₹240.54 lakh reported for FY 2024, highlighting the company's strong financial health.
Valuation and Financial Metrics: At the price band of ₹51 to ₹54 per equity share, the pre-issue earnings per share (EPS) stands at ₹5.18, while the post-issue EPS is expected to be ₹3.81. The pre-issue P/E ratio is 10.42x, and the post-issue P/E ratio is 14.17x, which is fairly priced compared to the industry P/E ratio of 15x. The company’s Return on Capital Employed (ROCE) for FY24 is 103.52%, and the Return on Equity (RoE) stands at a robust 71.66%. These financial ratios indicate that the IPO is reasonably priced, offering a good balance between growth potential and risk.
Grey Market Premium and Subscription Details: The Grey Market Premium (GMP) for Identical Brains Studios IPO has been a key indicator of investor interest. As of December 17, 2024, the GMP was ₹28, which suggests a potential listing gain of 51.85% from the issue price of ₹54 per share. This trend is supported by high subscription figures. As of December 18, 2024, the IPO was subscribed 58.09 times, a strong indicator of the IPO's popularity among investors.
Retail investors are required to apply for a minimum of ₹1,08,000 (2,000 shares), while High-Net-Worth Individuals (HNIs) need to apply for 4,000 shares, amounting to ₹2,16,000. The high demand for this IPO shows that the market has confidence in the company's future growth prospects and profitability.
Allotment Process: The allotment process will be finalized on December 23, 2024, and investors can check their allotment status online via the registrar’s website. To check allotment status, investors can follow a simple process:
- Navigate to the IPO allotment page.
- Select Identical Brains Studios IPO from the dropdown.
- Enter the application number or PAN.
- Submit the details to see the allotment status.
Use of Proceeds and Future Growth: The proceeds from the fresh issue will be used for several strategic purposes, including enhancing operational capabilities, expanding the workforce, and scaling the company’s VFX infrastructure to meet the growing demand in the entertainment industry. With the increasing demand for high-quality VFX services, Identical Brains Studios is well-positioned to grow further and capture a larger share of the market.
Investment Opportunity: For risk-tolerant investors, the Identical Brains Studios IPO presents an exciting opportunity to benefit from potential listing gains, backed by solid financial performance and strong market sentiment. Given the company's growing revenue, profitable business model, and positive Grey Market Premium, this IPO could provide significant returns in the short term.
In conclusion, investors interested in the VFX sector and those looking for short-term gains through IPO listing profits should consider applying to the Identical Brains Studios IPO. However, as with any investment, it’s essential to perform due diligence and consider the inherent risks before applying.
The Upcoming IPOs in this week and coming weeks are Ventive Hospitality, Senores Pharmaceuticals, Carraro India, Solar91 Cleantech, Unimech Aerospace, Rosmerta Digital, Indo Farm, and Avanse Financial.
The Current active IPO is Transrail Lighting, Mamata Machinery, DAM Capital Sanathan Textiles, Concord Enviro, Newmalayan Steel, Identical Brain Studios and NACDAC Infrastructure.