ShubhShree Biofuels Energy Limited made an impressive debut on September 16, 2024, with its shares listing at ₹189 on the NSE SME platform, a 59% premium over its IPO price of ₹119 per share. The initial public offering (IPO) was oversubscribed 132.89 times, showcasing significant demand from both retail and institutional investors.

About ShubhShree Biofuels Energy Limited

Founded in 2021, ShubhShree Biofuels Energy Ltd has established itself as a leader in Biomass Supply Chain Management in India. With a focus on sustainability and the use of cutting-edge technology, the company operates across multiple locations in India, contributing to the country's growing energy sector through the provision of biomass fuels.

The company’s focus on environmental sustainability and advanced technology solutions has enabled it to quickly scale its operations and meet the increasing demand for alternative energy sources, particularly biomass energy, which plays a key role in reducing carbon emissions.

ShubhShree Biofuels Energy IPO Overview

The ShubhShree Biofuels Energy IPO was a Book Built Issue valued at ₹16.56 crore, with an entirely Fresh Issue of 13.92 lakh shares. The IPO subscription period ran from September 9 to September 11, 2024, with a price band of ₹113 to ₹119 per share. Investors had to buy at least 1,200 shares, meaning retail investors had to invest a minimum of ₹142,800, while High-Net-Worth Individuals (HNIs) needed to purchase at least 2,400 shares, equating to a minimum investment of ₹285,600.

HEM Securities Limited served as the book-running lead manager, and Bigshare Services Private Limited was the registrar for the issue. Hem Finlease Private Limited acted as the market maker for the IPO.

ShubhShree Biofuels Energy IPO Live Subscription Status

On the final day of bidding, the ShubhShree Biofuels Energy IPO was subscribed 132.89 times in total. The retail portion was oversubscribed by 112.54 times, and the non-institutional investors (NIIs) portion saw a massive subscription of 238.64 times. The qualified institutional buyers (QIB) portion also attracted strong interest with a subscription rate of 48.67 times.

Investors who participated in the IPO can check the ShubhShree Biofuels Energy IPO allotment status on the Bigshare Services Private Limited website by following these steps:

Go to the IPO allotment status page.

Select ShubhShree Biofuels Energy Limited IPO from the dropdown list.

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

Submit the details to check your allotment status.

Grey Market Premium (GMP)

Prior to the listing, the Grey Market Premium (GMP) for ShubhShree Biofuels Energy IPO was in the range of ₹50 to ₹60, indicating potential listing gains of 40-50%. The actual listing surpassed these expectations, with the stock debuting at ₹189 per share, a 58.82% increase over the issue price. While GMP provides some indication of investor sentiment, it is crucial to remember that it is not an official measure of stock performance and should be viewed with caution.

Financial Performance of ShubhShree Biofuels Energy Limited

ShubhShree Biofuels Energy has shown strong financial growth over the past few years. In FY22, the company reported revenues of ₹791.83 lakhs, which surged to ₹5,971.24 lakhs in FY23, and further increased to ₹9,488.32 lakhs in FY24. This significant growth in revenue is reflective of the company’s expanding presence in the biomass supply chain market.

The company’s EBITDA also grew steadily, rising from ₹34.21 lakhs in FY22 to ₹225.46 lakhs in FY23, and currently standing at ₹415.82 lakhs in FY24. Similarly, the Profit After Tax (PAT) increased from ₹27.46 lakhs in FY22 to ₹242.38 lakhs in FY23, and further to ₹329.77 lakhs in FY24, demonstrating the company’s ability to drive profitability while scaling its operations.

IPO Valuation & Ratios

For the ShubhShree Biofuels Energy IPO, the company is offering shares at a pre-issue EPS of ₹8.60 and a post-issue EPS of ₹8.56. The company’s pre-issue P/E ratio is 13.83x, while the post-issue P/E ratio is slightly higher at 13.90x. These ratios indicate that the IPO is fairly priced in comparison to industry standards.

Additionally, ShubhShree Biofuels Energy has posted impressive return metrics, with a Return on Capital Employed (ROCE) of 61.67% and a Return on Equity (ROE) of 68.15% for FY24. These figures suggest that the company is utilizing its capital efficiently to generate returns for investors.

Use of IPO Proceeds

The proceeds from the ShubhShree Biofuels Energy IPO will be allocated as follows:

₹212.52 lakhs will be used for capital expenditure to install new plant and machinery.

₹900 lakhs will go towards meeting the company’s working capital requirements.

The remaining funds will be utilized for general corporate purposes.

ShubhShree Biofuels Energy IPO Review and Recommendation

ShubhShree Biofuels Energy Ltd has quickly established itself as a key player in the biomass supply chain industry in India, with a strong focus on sustainability and technological innovation. The company’s rapid financial growth and significant presence in a growing market make it an attractive investment opportunity.

With its shares listing at a 59% premium, investors who participated in the IPO have already realized substantial gains. The company’s strong revenue growth, increasing profitability, and efficient use of capital suggest that it is well-positioned for continued success.

Given the company’s solid financial performance and the valuation of the IPO, we recommend investors to apply for the ShubhShree Biofuels Energy IPO for both listing gains and long-term investment. The company’s focus on sustainability and its leading role in the biomass energy sector offer significant growth potential in the coming years.

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