Phoenix Overseas Limited has recently made its debut on the NSE SME platform, with shares listing at ₹64, matching the IPO price. This lackluster opening reflects the challenges facing the company in the current market environment, but it also highlights the significant interest generated during the subscription period.

Founded as a prominent trading house, Phoenix Overseas Limited is recognized by the Ministry of Commerce, Government of India. The company is engaged in various sectors, including the export of commodities, manufacturing and exporting jute bags, and handicrafts, alongside operating multipurpose cold storage facilities. These diverse operations contribute to Phoenix's identity as a business conglomerate committed to collaborative growth and sustainable practices.

The Phoenix Overseas IPO, which was a book-built issue amounting to ₹36.03 Crores, consisted of a fresh issue of 45.8 lakh shares valued at ₹29.31 Crores and an offer for sale of 10.5 lakh shares totaling ₹6.72 Crores. The subscription period for this IPO ran from September 20 to September 24, 2024, and shares were allotted on September 25, 2024, just before the listing on September 27, 2024. The share price band was set between ₹61 to ₹64 per share, with a minimum lot size of 2,000 shares, necessitating an investment of ₹128,000 for retail investors and ₹256,000 for High-Net-Worth Individuals (HNIs).

Leading the issue is Khandwala Securities Limited as the book-running lead manager, while Cameo Corporate Services Limited acts as the registrar. Nikunj Stock Brokers Limited serves as the sole market maker for the IPO, ensuring liquidity and market stability for investors.

The Grey Market Premium (GMP) for Phoenix Overseas Limited IPO was expected to range between ₹19 to ₹22, reflecting potential demand and supply dynamics. While the GMP offers some insights into anticipated listing gains, it is crucial to note that trading in the grey market does not guarantee accurate price discovery. The GMP is primarily driven by unregulated market activities, which investors should approach with caution.

As of 12:50 PM on September 23, 2024, the live subscription status indicated that the IPO was subscribed 8.11 times, a strong indicator of interest from investors. This level of subscription often reflects confidence in the company’s potential, even amidst broader market fluctuations.

On the allotment date, investors can check their status by navigating to the IPO allotment status page, selecting Phoenix Overseas Limited from a dropdown menu, and entering their application number, PAN, or DP Client ID. This straightforward process ensures that investors can efficiently verify their allotment and plan their subsequent investment strategies.

Objectives of the Phoenix Overseas Limited IPO

The proceeds from the fresh issue will be allocated towards several strategic initiatives:

Funding Working Capital: ₹1,000.00 Lakhs is earmarked for enhancing the company’s operational liquidity.

Inorganic Growth Initiatives: ₹600.00 Lakhs will be utilized for pursuing growth opportunities through acquisitions and partnerships.

General Corporate Purposes: The remainder will support various corporate activities aimed at ensuring sustainable business growth.

Financial Performance

Financially, Phoenix Overseas Limited has demonstrated robust growth over the past few fiscal years. For FY24, the company's revenue reached ₹54,915.10 Lakhs, a significant increase from ₹45,131.61 Lakhs in FY23 and ₹37,828.19 Lakhs in FY22. The EBITDA figures also showed improvement, with ₹1,297.17 Lakhs for FY24 compared to ₹1,198.24 Lakhs in FY23 and ₹956.99 Lakhs in FY22.

The profit after tax figures for these years were ₹538.38 Lakhs for FY24, ₹371.49 Lakhs for FY23, and ₹390.52 Lakhs for FY22. These financial metrics underscore the company's solid performance and operational efficiency, which are crucial for investor confidence.

In terms of valuation, the Phoenix IPO presents a pre-issue EPS of ₹411.71 and a post-issue EPS of ₹2.78. The pre-issue P/E ratio stands at 5.46x, while the post-issue P/E ratio is 23.02x. The Return on Capital Employed (ROCE) for FY24 is 23.88%, and the Return on Equity (ROE) is 10.97%, indicating a balanced approach to profitability and shareholder returns.

Investment Recommendation

Given the financial performance and valuation metrics, the IPO appears to be fairly priced. For investors seeking listing gains or considering a long-term investment strategy, it is advisable to approach the Phoenix Overseas Limited IPO with caution, recognizing the inherent risks associated with market fluctuations.

In conclusion, the debut of Phoenix Overseas Limited shares on the NSE SME platform at ₹64 may seem unimpressive, but it reflects the complexities of the current market landscape. The significant subscription rates and robust financial health of the company present intriguing opportunities for investors. As always, prudent investment decisions should be made based on thorough research and consideration of market conditions.

For those interested in exploring further, check out our list of Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi and stay updated with the 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, a SEBI registered research analyst, and follow the Finance Saathi Telegram Channel for regular share market news and IPO updates.

Start your stock market journey by applying for an IPO and opening a free demat account with Choice Broking FinX today!