The OBSC Perfection IPO is one of the most anticipated listings in the precision metal component manufacturing sector. Opening for subscription from October 22 to October 24, 2024, this IPO has caught the attention of both retail and institutional investors due to the company's strong track record and established presence across top Original Equipment Manufacturers (OEMs) in India’s automotive industry. Here’s a comprehensive look at all the key details.

IPO Details

The IPO is a Book Built Issue comprising a fresh issue of ₹66.02 crores, with 66.02 lakh shares up for grabs. OBSC Perfection caters to major OEMs who supply components to leading automotive manufacturers in India. This is a key driver of their revenue, as they maintain close ties with top players in the automotive industry.

The price band for the IPO is set between ₹95 and ₹100 per share, making it an attractive entry point for potential investors. The minimum lot size for retail investors is 1,200 shares, requiring a minimum investment of ₹1,20,000, while HNIs (High-Net-Worth Individuals) are required to invest in a minimum of two lots, totaling ₹2,40,000.

The lead manager for the issue is UNISTONE CAPITAL PRIVATE LIMITED, while BIGSHARE SERVICES PRIVATE LIMITED will handle the IPO allotment as the registrar. Additionally, R. K. Stock Holding Private Limited will act as the market maker for this IPO.

  ▪ OBSC Perfection IPO Dates to Remember

  ▪ IPO Subscription Start Date: October 22, 2024

  ▪ IPO Subscription End Date: October 24, 2024

  ▪ IPO Allotment Date: October 25, 2024

  ▪ Tentative Listing Date: October 29, 2024 (NSE SME)

Grey Market Premium (GMP) Update

As of now, the Grey Market Premium (GMP) for the OBSC Perfection IPO stands at ₹0. This suggests that there is no strong expectation for listing gains. The GMP is typically driven by demand and supply in the grey market, an unregulated space, which can serve as an early indicator of market sentiment. However, it is important to note that GMP figures can be volatile and should not be the sole basis for investment decisions. Investors are advised to focus on the company's financial performance and valuation when making decisions.

Financial Overview

OBSC Perfection has shown consistent growth in revenue and profitability. For the five months ending August 31, 2024, the company reported revenues of ₹5,700.15 lakhs, with EBITDA of ₹1,031.99 lakhs, and profit after tax (PAT) of ₹603.05 lakhs. In Fiscal Year 2024, their revenues stood at ₹11,611.41 lakhs, with a PAT of ₹1,221.21 lakhs.

The company’s Return on Capital Employed (ROCE) for FY24 is 31.49%, while the Return on Equity (RoE) is an impressive 40.61%. Given the pre-issue and post-issue P/E ratios of 14.61x and 20.04x respectively, the IPO is fairly priced compared to the industry P/E of 40.45x.

IPO Objectives

The proceeds from the IPO will be used to:

  ▪ Expand existing manufacturing facilities at Unit III in Tamil Nadu and Unit IV in Pune.

  ▪ Fund the purchase of machinery to increase production capacity.

  ▪ Provide additional working capital for future operations.

  ▪ Cover general corporate purposes.

Should You Invest?

With the P/E ratio falling below the industry average, the IPO appears to be conservatively priced. However, given the current GMP of ₹0, investors may want to avoid this IPO for listing gains. Instead, it could appeal to those looking at a long-term investment due to the company's robust financial performance, strong client base among top OEMs, and promising expansion plans.

For more updates and Live Subscription Status of the OBSC Perfection IPO, stay tuned to our platform. You can also check the allotment status by navigating to the registrar's website and entering your application number or PAN.

Looking for more insights on upcoming IPOs? Explore our Best IPO to Apply Now by visiting IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi.

For the latest on share market trends, business news, and economy updates, head to Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News - Finance Saathi.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst. Also, stay updated on Share Market News & IPO Updates via the Finance Saathi Telegram Channel.

Start your stock market journey by Opening a Free Demat Account at Choice Broking FinX. Happy trading!