OBSC Perfection is a precision metal component manufacturer offering a diverse range of precision engineering products, delivering high-quality engineered parts across various end-user industries and geographies. The company primarily serves top OEMs, supplying components and parts to leading automotive manufacturers in India.

Now, OBSC Perfection is preparing for its initial public offering (IPO), amounting to ₹66.02 Crores, entirely consisting of a fresh issue of 66.02 lakh shares. The subscription period for the OBSC Perfection IPO opens on October 22, 2024, and closes on October 24, 2024. The allotment is expected to be finalized on or about Friday, October 25, 2024, with shares set to list on the NSE SME on or about Tuesday, October 29, 2024.

Pricing and Market Capitalization

The share price band for the OBSC Perfection IPO is set at ₹95 to ₹100 per equity share. The minimum lot size is 1,200 shares, requiring retail investors to make a minimum investment of ₹1,20,000. For High-Net-Worth Individuals (HNIs), the minimum investment is two lots (2,400 shares), totaling ₹2,40,000.

IPO Management

UNISTONE CAPITAL PRIVATE LIMITED is the book-running lead manager, while BIGSHARE SERVICES PRIVATE LIMITED serves as the registrar for the issue. Additionally, R. K. Stock Holding Private Limited will act as the market maker for the OBSC Perfection IPO.

Grey Market Premium and Subscription Status

As of the morning of October 23, 2024, the Grey Market Premium (GMP) for the OBSC Perfection Limited IPO is expected to be ₹0, indicating no anticipated listing gains based on current market conditions. It is essential to understand that no real trading occurs based on the GMP, which relies on demand and supply in the unregulated market.

As of 10:27 PM on October 23, the OBSC Perfection IPO live subscription status shows that the IPO is subscribed 0.83 times on its second day, suggesting limited investor interest. Investors can check real-time updates on the NSE.

Anchor Investors and Allocation

OBSC Perfection Limited has raised ₹18.79 Crores from anchor investors at a price of ₹110 per share. The company allocated 18,79,200 equity shares to these investors, with the shares allotted from the Qualified Institutional Buyers (QIBs) reservation portion.

Allotment Date and How to Check Status

The allotment date for the OBSC Perfection IPO is set for October 25, 2024. Investors can check their allotment status online by following these steps:

Navigate to the IPO allotment status page.

Select OBSC Perfection Limited IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the details to view your allotment status.

By following these steps, investors can quickly determine their allotment status and proceed accordingly with their investments.

Objectives of the IPO

The proceeds from the fresh issue of the OBSC Perfection IPO will be utilized for the following objectives:

₹1,542.00 Lakhs for funding capital expenditure towards the purchase of machinery for their existing manufacturing facility (Unit III) in Tamil Nadu.

₹1,517.00 Lakhs for funding capital expenditure for machinery for their existing manufacturing facility (Unit IV) in Maharashtra.

₹1,666.00 Lakhs for funding the company’s working capital requirements.

General corporate purposes.

Financial Performance and IPO Review

The company is led by a team of experienced promoters, including Saksham Leekha, Ashwani Leekha, Sanjeev Verma, Rajni Verma, Asha Narang, Sandeep Narang, Richard Blum, Adrianne Blum, Pascal Blum, and Simon Blum. They bring extensive experience in the steel and auto components industry, acting as a driving force for the company.

The revenues from operations for the five-month period ended August 31, 2024, and the fiscal years 2024, 2023, and 2022 were ₹5,700.15 Lakhs, ₹11,611.41 Lakhs, ₹9,691.03 Lakhs, and ₹5,672.42 Lakhs, respectively. The EBITDA for these periods were ₹1,031.99 Lakhs, ₹2,076.10 Lakhs, ₹973.81 Lakhs, and ₹708.39 Lakhs. The profit after tax for the five-month period was ₹603.05 Lakhs, showcasing the company’s ability to generate profits.

For the OBSC Perfection IPO, the company is issuing shares at a pre-issue EPS of ₹6.84 and a post-issue EPS of ₹4.99. The pre-issue P/E ratio stands at 14.61x, while the post-issue P/E ratio is 20.04x against an industry P/E ratio of 40.45x. The company's ROCE for FY24 is 31.49%, and RoE is 40.61%, indicating that the IPO is fairly priced.

However, the Grey Market Premium (GMP) suggests limited interest, showing potential listing gains of 0%. Given the company's financial performance and IPO valuation, we recommend that investors avoid the OBSC Perfection Limited IPO for potential listing gains or long-term investment purposes.

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