Indobell Insulation Limited IPO presents an opportunity for investors to tap into the growing insulation products market in India. The company is a well-established manufacturer and contractor specializing in thermal insulation materials, including Nodulated/Granulated Wool (mineral and ceramic fibre nodules) and prefabrication thermal insulation jackets. These products are crucial for insulation in applications across homes, commercial buildings, and industrial plants, making the company a key player in the thermal insulation industry.

The IPO is a Fixed Price Issue of ₹10.14 Crores, with the offering consisting entirely of a fresh issue of 22.05 Lakh shares at a fixed price of ₹46 per share. The market capitalization of Indobell Insulation Limited at the IPO price is estimated at ₹28.97 Crores. The lot size for the IPO is 3,000 shares, requiring a minimum investment of ₹1,38,000 for retail investors and ₹2,76,000 for High-Net-Worth Individuals (HNIs), who must apply for 2 lots (6,000 shares).

Company Overview

Founded by Mr. Vijay Burman, who brings over 52 years of experience in the insulation and related industries, Indobell Insulation Limited benefits from a highly experienced management team. The company's operational scope covers a wide range of insulation products that cater to both residential and industrial needs, ensuring energy efficiency and thermal protection. With a strong market presence and growing demand for insulation materials, Indobell Insulation is well-positioned in the industry.

Financial Performance

Indobell Insulation Limited has demonstrated steady growth in recent years, with a revenue increase from ₹977.31 Lakh in FY2022 to ₹1,798.57 Lakh in FY2023. For the period ending September 30, 2024, the company reported ₹556.30 Lakh in revenues, signaling strong recovery.

Key financials include:

• EBITDA for FY2024 stands at ₹86.39 Lakh, reflecting the company's efficient cost management.
• The Profit After Tax (PAT) for FY2024 is ₹42.39 Lakh, continuing its upward trajectory from ₹15.34 Lakh in FY2022.
• The company’s performance indicates consistent growth, though it remains relatively small compared to larger peers in the market.

Key Metrics and Valuation

• The pre-issue EPS stands at ₹2.52, while the post-issue EPS is expected to be ₹1.64 for FY24.
• The pre-issue P/E ratio is 18.25x, and the post-issue P/E ratio increases to 28.06x after the fresh issue.
• The company’s ROCE is 28.15%, and ROE is 18.21%, suggesting good returns on invested capital.

Grey Market Premium (GMP)

As of January 2, 2025, the Grey Market Premium (GMP) for Indobell Insulation IPO is ₹0, indicating no expected listing gains. While GMP is not a definitive indicator of the IPO’s performance, the lack of premiums may signal lower investor demand for the shares in the grey market, suggesting a neutral to cautious approach.

IPO Subscription and Allotment Status

The subscription period for the Indobell Insulation IPO opens on January 6, 2025, and closes on January 8, 2025. Investors can check the allotment status starting January 9, 2025 by following these steps:

• Visit the IPO allotment status page.
• Select Indobell Insulation Limited IPO from the dropdown list.
• Enter your application number, PAN, or DP Client ID.
• Submit the details to view the allotment status.

Objectives of the IPO

The net proceeds from the IPO will be utilized for the following purposes:

1. ₹41.00 Lakh for purchasing additional plant and machinery to enhance production capabilities.
2. ₹775.80 Lakh to meet the company’s working capital requirements.
3. ₹70.00 Lakh for general corporate purposes.

Recommendation and Conclusion

Given the modest size of the offering and the neutral Grey Market Premium, Indobell Insulation IPO may appeal to those looking for a niche investment in the thermal insulation sector. However, considering the lower listing gains and the higher post-issue P/E ratio, we recommend investors to approach the IPO cautiously.

The Upcoming IPOs in this week and coming weeks are Indobell Insulation, Standard Glass Lining, Quadrant Future, Capital Infra Trust, Delta Autocorp, Avax Apparels and B R Goyal.

The Current active IPO are   Fabtech Technologies, Davin Sons and Parmeshwar Metal.

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