Services
Equity Trading with CA Abhay
Equity Investment with CA Abhay
Option Trading with CA Abhay
Stock Market Masterclass
FNO Stocks with CA Abhay
Newmalayalam Steel IPO day 1: Check GMP Today, subscription status and review before applying
Team Finance Saathi
19/Dec/2024
What's covered under the Article:
- Key details of Newmalayalam Steel IPO 2024 including subscription, GMP, and allotment process.
- Information on the company's objectives and financial performance.
- An analysis of the IPO's pricing, grey market premium, and listing expectations.
Newmalayalam Steel Limited is a renowned player in the construction materials sector, specializing in galvanized steel pipes. The company is launching its IPO to raise ₹41.76 Crores through a fresh issue of 46.4 Lakh shares. The subscription period opens on December 19, 2024, and closes on December 23, 2024, with the shares expected to be listed on the NSE SME on December 27, 2024.
The IPO has a price band set between ₹665 and ₹701 per share, with a market capitalization of ₹155.59 Crores at the IPO price of ₹90 per share. The lot size is 1,600 shares, and the minimum retail investment required is ₹1,44,000. For High-Net-Worth Individuals (HNIs), the minimum investment is ₹2,88,000, for 2 lots (3,200 shares).
The lead manager for the IPO is KHANDWALA SECURITIES LIMITED, and KFin Technologies Limited is the registrar. Aftertrade Broking Private Limited will act as the Market Maker.
Newmalayalam Steel IPO GMP
The Grey Market Premium (GMP) for Newmalayalam Steel IPO is currently ₹14, indicating a potential listing gain of around 15.23%. However, it's important to note that Grey Market Premium is speculative, and no real trading is conducted based on GMP. It’s presented for educational and informational purposes only.
Newmalayalam Steel IPO Live Subscription Status
As of 12:50 PM on December 19, 2024, the IPO has been subscribed 0.96 times on its first day. Investors can track real-time subscription updates on the NSE website.
Objectives of the Newmalayalam Steel IPO
Newmalayalam Steel intends to utilize the proceeds of the IPO for the following objectives:
- ₹287.62 Lakh for IT and technological upgrades of the existing manufacturing facility.
- ₹234.33 Lakh for expanding its solar power generation facility.
- ₹255.95 Lakh for civil construction of a new factory shed and storage facility.
- ₹505.55 Lakh for advertising, marketing, and brand building.
- ₹1,420.00 Lakh for funding incremental working capital requirements.
- General corporate purposes and Issue related expenses.
Financial Performance and Valuation
For the period ending September 30, 2024, the company posted revenues of ₹15,533.82 Lakh, with an EBITDA of ₹958.34 Lakh and a Profit after Tax (PAT) of ₹-519.30 Lakh. The P/E ratio for the IPO is 25.63x pre-issue and 35.96x post-issue, compared to the industry P/E ratio of 39x. The company has a Return on Capital Employed (ROCE) of 17.60% and Return on Equity (RoE) of 10.55% for FY24.
Valuation Insights
Based on the financials and valuation metrics, the Newmalayalam Steel IPO appears to be fairly priced. However, with the company's negative PAT for FY24, it may not provide immediate listing gains. The GMP suggests potential gains, but investors should consider the company's long-term performance rather than short-term returns.
Key Takeaways:
- The Newmalayalam Steel IPO offers a fresh issue to raise funds for expansion and technological improvements.
- The IPO grey market premium of ₹14 suggests potential listing gains, but it's speculative.
- The company’s financial performance and valuation suggest the IPO is fairly priced but might not provide immediate listing gains.
Conclusion
While Newmalayalam Steel IPO offers potential growth in the construction materials and steel manufacturing sector, the company's financials, especially with a negative PAT, should be carefully evaluated. The GMP suggests potential gains on listing, but investors should avoid relying solely on the GMP and focus on the company's long-term potential.
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.