Pelatro Limited, a global technology company, made its stock market debut with its shares being listed at ₹275 apiece on the NSE SME exchange, reflecting a 37.50% premium over the issue price of ₹200 per share. This strong debut rewarded retail investors and high-net-worth individuals (HNIs) who had participated in the IPO. Pelatro’s business revolves around its innovative platform, mViva, which enhances customer engagement by providing enterprises with insights into consumer behavior, helping brands foster deeper connections with their customers.

IPO Details

The Pelatro IPO was a book-built issue amounting to ₹55.98 crore, comprising a fresh issue of 27.99 lakh shares. The price band for the IPO was set between ₹190 and ₹200 per equity share, and the subscription window opened from September 16, 2024, to September 19, 2024. The minimum investment for retail investors was ₹120,000, while HNIs needed to invest in a minimum of two lots (1,200 shares) for ₹240,000.

The lead manager for this issue was Cumulative Capital Private Limited, with Bigshare Services Private Limited handling the role of registrar, ensuring a smooth allotment process for investors. The market maker for Pelatro IPO was Shree Bahubali Stock Broking Limited.

Financial Overview

While Pelatro's listing gains have excited investors, the company's financial metrics raise concerns. For Fiscal Year 2024, Pelatro posted a revenue of ₹5,536.54 lakhs, an EBITDA of ₹311.15 lakhs, and a profit after tax of ₹195.62 lakhs. However, the pre-issue earnings per share (EPS) stood at a negative ₹-5.15, and the post-issue EPS at ₹-1.86. This resulted in pre-issue P/E ratio of -38.83x and a post-issue P/E ratio of -107.52x, indicating that the IPO might be priced on the higher side. The company's return on capital employed (ROCE) for FY24 was 3.85%, while the return on equity (ROE) was -15.48%, reflecting the challenges Pelatro faces in delivering consistent profitability.

Given these financial metrics, analysts suggest that investors exercise caution before considering Pelatro for long-term investment. The company is still in its growth phase, and its high valuation may not justify the risks involved. While listing gains are evident, long-term investors may need to keep an eye on the company’s performance and future financial updates.

Grey Market Premium and Subscription Status

The Grey Market Premium (GMP) for Pelatro’s IPO hovered around ₹0, reflecting a lack of speculative activity before the listing. Despite this, the IPO saw strong demand from institutional investors, with the subscription status reaching 0.38 times by the end of the first day. Notably, Pelatro raised ₹15.63 crore from anchor investors, allocating 7,81,800 shares at ₹200 per share to qualified institutional buyers (QIBs). While GMP trading provided little insight into market sentiment, the IPO performed well on its listing day.

Allotment and Listing Process

Pelatro’s allotment was finalized on September 20, 2024, and the shares were listed on September 24, 2024. Investors who wish to check their allotment status can do so by visiting the registrar’s website and entering their application number, PAN, or DP Client ID to confirm their share allocation. The robust demand and allotment indicate strong market confidence in the company despite its financial challenges.

Strategic Objectives

Pelatro intends to use the IPO proceeds to fund several key objectives:

₹1,011.56 lakhs will be directed toward capital expenditure for IT equipment and infrastructure.

₹1,000 lakhs will be invested in their subsidiary to drive further growth.

₹1,500 lakhs is earmarked for working capital needs, ensuring the company has sufficient liquidity for its operations. The remaining funds will be allocated to general corporate purposes.

Conclusion

While Pelatro has delivered impressive listing gains, the company's financial performance and valuation metrics suggest it may not be an ideal pick for long-term investors. The high P/E ratio and negative EPS raise concerns about the company’s ability to sustain profitability. However, with its innovative mViva platform and growing customer base, Pelatro has positioned itself as a technology-driven player in the customer engagement space, which could drive future growth.

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