Saharsa Electronic Solutions Limited has officially launched its IPO for subscription on September 26, 2024, with a strong emphasis on Environmental, Social, and Governance (ESG) principles that guide its operational philosophy. As the company aims to promote sustainability and social responsibility, it is well-positioned to meet the evolving expectations of modern investors.

The Saharsa IPO is a Book Built Issue amounting to ₹186.15 Crores, consisting of a Fresh Issue of 60.78 Lakh Shares valued at ₹172.00 Crores and an Offer for Sale of 5.00 Lakh Shares totaling ₹14.15 Crores. The subscription period for this IPO will run until September 30, 2024, with the allotment date expected to be finalized on October 1, 2024, and shares to be listed on the NSE SME platform on or about October 4, 2024.

The share price band for the Saharsa IPO is set between ₹269 to ₹283 per equity share, with a minimum lot size of 400 shares. This translates to a minimum investment requirement of ₹1,13,200 for retail investors and ₹2,26,400 for High-Net-Worth Individuals (HNIs) who are required to invest in a minimum of two lots. The IPO has garnered considerable interest from potential investors, reflected in the early subscription statistics.

Anchor Investor Support

Saharsa Electronic Solutions has successfully raised ₹53.03 Crores from Anchor Investors at the upper end of the price band, which amounts to ₹283 per share. A total of 18,74,000 equity shares were allocated to these investors, signifying strong institutional interest. It is noteworthy that allocations to anchor investors are derived from the Qualified Institutional Buyers (QIBs) reservation portion, showcasing confidence in the company’s long-term prospects.

Grey Market Premium and Subscription Status

As of 12:42 PM on September 26, 2024, the Saharsa IPO is reported to be subscribed 1.08 times, indicating a healthy level of interest among investors. The Grey Market Premium (GMP) for Saharsa Electronic Solutions is currently estimated in the range of ₹110 to ₹117. However, it's important to note that the GMP reflects unregulated market conditions, and any price discovery before the actual listing should be approached with caution.

Objectives of the Saharsa IPO

The proceeds from the Fresh Issue will be allocated towards several key objectives, including:

Funding Capital Expenditure: Approximately ₹6,596.63 Lakhs is earmarked for the installation of additional plant and machinery at a new manufacturing facility in Bhiwadi, Rajasthan.

Investment in Subsidiary: About ₹2,292.58 Lakhs will be directed towards Sahasra Semiconductors Private Limited to support its capital expenditure needs.

Meeting Working Capital Requirements: The company has allocated ₹4,000.00 Lakhs to fulfill its operational liquidity needs.

General Corporate Purposes: The remaining funds will be used to bolster various corporate activities.

Financial Performance

Saharsa Electronic Solutions has shown impressive financial growth, with revenue figures escalating from ₹1,063.91 Lakhs in FY23 to ₹10,278.79 Lakhs in FY24. The EBITDA figures also reflect robust performance, rising from ₹1,876.88 Lakhs in FY23 to ₹3,526.58 Lakhs in FY24. The Profit After Tax (PAT) has witnessed a substantial increase, moving from ₹230.55 Lakhs in FY23 to ₹3,262.77 Lakhs in FY24.

For the Saharsa Electronic Solutions IPO, the company’s pre-issue EPS is pegged at ₹18.05, while the post-issue EPS is estimated to be ₹13.05. The pre-issue P/E ratio stands at 15.67x, compared to a post-issue P/E ratio of 21.68x, well below the industry average P/E ratio of 167.77x. The company’s Return on Capital Employed (ROCE) for FY24 is a commendable 42.50%, and its Return on Equity (ROE) is an impressive 54.09%, indicating strong operational efficiency and profitability.

Investment Recommendation

Given the company’s solid financial performance and commitment to ESG principles, the Saharsa Electronic Solutions IPO is being recommended for both listing gains and long-term investment potential. The attractive Grey Market Premium suggests potential listing gains of approximately 25% to 30%, making it an enticing opportunity for investors looking to diversify their portfolios.

In conclusion, the Saharsa Electronic Solutions Limited IPO represents not just a financial investment but a chance to support a company dedicated to responsible corporate governance and sustainability. As the subscription period unfolds, investors are encouraged to carefully consider this opportunity and participate accordingly.

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