OBSC Perfection is a prominent precision metal component manufacturer, offering a diverse range of high-quality engineering products across various industries and geographical regions. The company primarily serves top Original Equipment Manufacturers (OEMs) who supply components to leading automotive manufacturing companies in India. With a focus on precision engineering, OBSC Perfection has established itself as a reliable partner in the automotive supply chain, making significant contributions to the sector's growth.

The initial public offering (IPO) from OBSC Perfection is a book-built issue amounting to ₹66.02 crore, entirely comprising a fresh issue of 66.02 lakh shares. The subscription period for this IPO opens on October 22, 2024, and closes on October 24, 2024. Allotment of shares is expected to be finalized on or about October 25, 2024, with a tentative listing date on the NSE SME set for around October 29, 2024.

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

Lead Managers and Market Maker
UNISTONE CAPITAL PRIVATE LIMITED is the book-running lead manager for the IPO, while BIGSHARE SERVICES PRIVATE LIMITED serves as the registrar. R. K. Stock Holding Private Limited will act as the Market Maker, facilitating trading in the shares post-listing.

OBSC Perfection Limited IPO Grey Market Premium (GMP)
Currently, the Grey Market Premium (GMP) for the OBSC Perfection IPO is expected to be ₹0, indicating that the demand for shares is minimal at this stage. It’s important to note that no significant trading is based on the GMP, and it should be regarded as an educational tool rather than a concrete indicator of future performance.

Live Subscription Status and Allotment Process
The subscription for the OBSC Perfection IPO begins on October 22, 2024. Investors can track the live subscription status to gauge interest and demand for the IPO. The allotment date is scheduled for October 25, 2024. To check your allotment status online, follow these steps:

Visit the IPO allotment status page on the registrar's website.

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.

Objectives of the IPO
The proceeds from the fresh issue will be utilized for the following purposes:

₹1,542.00 lakhs for funding capital expenditure requirements 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 to support the working capital requirements of the company.

Remaining funds will be allocated for general corporate purposes.

Financial Performance and Management Team
OBSC Perfection has demonstrated solid financial performance over recent periods. For the five-month period ending August 31, 2024, the company reported revenues from operations of ₹5,700.15 lakhs. The fiscal revenues for the years 2024, 2023, and 2022 were ₹11,611.41 lakhs, ₹9,691.03 lakhs, and ₹5,672.42 lakhs, respectively.

The company achieved an EBITDA of ₹1,031.99 lakhs during the same period, with annual figures of ₹2,076.10 lakhs for FY24, ₹973.81 lakhs for FY23, and ₹708.39 lakhs for FY22. Additionally, the Profit after Tax (PAT) for the five-month period was ₹603.05 lakhs, with fiscal results of ₹1,221.21 lakhs for FY24, ₹457.39 lakhs for FY23, and ₹360.11 lakhs for FY22.

The management team includes seasoned professionals:

Saksham Leekha

Ashwani Leekha

Sanjeev Verma

Rajni Verma

Asha Narang

Sandeep Narang

Richard Blum

Adrianne Blum

Pascal Blum

Simon Blum

This team brings extensive experience from the steel and auto components industry, providing a strong foundation for the company's operations and growth strategy.

Valuation Metrics
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 is 14.61x, while the post-issue P/E ratio stands at 20.04x, compared to an industry P/E ratio of 40.45x. With a ROCE of 31.49% and RoE of 40.61% for FY24, these metrics suggest that the IPO is fairly priced but may not present a compelling investment opportunity based on the current valuation.

Final Review and Recommendation
Given the financial performance and the current GMP indicating 0% potential listing gains, we advise investors to avoid applying for the OBSC Perfection Limited IPO for both listing gains and long-term investment purposes. The company's future prospects may depend on broader market conditions and its ability to capitalize on growth opportunities in the automotive sector.

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