Super Iron Foundry Limited, known for its high-quality iron and steel castings, is set to launch its Initial Public Offering (IPO) to raise ₹ 68.05 crores through a fresh issue of 63.01 lakh shares. The IPO opens for subscription on March 11, 2025, and closes on March 13, 2025, with the allotment date expected to be March 17, 2025. Shares will be listed on the BSE SME platform with a tentative listing date of March 19, 2025.

The price per share is set at ₹ 108, and the market capitalization of the company at the IPO price will be ₹ 252.65 crores. Retail investors can invest a minimum of ₹ 1,29,600 for 1,200 shares, while High-Net-Worth Individuals (HNIs) must invest ₹ 2,59,200 for 2,400 shares. The lot size of the IPO is 1,200 shares, making it an accessible opportunity for individual and institutional investors alike.

Company Overview

Super Iron Foundry manufactures a wide array of iron and steel castings, including access covers, gully grates, municipal castings, and various other industrial components. The company serves global markets with sustainable production processes, utilizing a modern, robotic-equipped facility. With an established track record in the roadway construction, automotive, and railway components sectors, Super Iron Foundry has positioned itself as a leading casting solutions provider worldwide.

Financial Overview and Performance

Super Iron Foundry has reported steady financial growth over the past few years. As of December 31, 2024, the revenues from operations were ₹ 9,490.99 lakh, reflecting consistent performance over the last three fiscal years. The company's EBITDA for the same period was ₹ 2,374.78 lakh, and Profit After Tax (PAT) was ₹ 952.53 lakh, reflecting a strong profit trajectory.

Key Financial Metrics

• Pre-issue EPS (Earnings Per Share): ₹ 2.39
• Post-issue EPS: ₹ 1.68
• P/E Ratio (Price to Earnings Ratio): Pre-issue: 45.19x, Post-issue: 64.11x
• Industry P/E Ratio: 50x

The Return on Capital Employed (ROCE) for FY24 stands at 7.53%, while the Return on Equity (ROE) is 7.22%, suggesting efficient capital utilization.

Grey Market Premium (GMP) and IPO Valuation

The Grey Market Premium (GMP) for the Super Iron Foundry IPO is currently at ₹ 0, indicating that the shares are not expected to have any immediate listing gains in the grey market. This suggests that the company’s valuation might be fully priced based on its current financials, and there are no anticipated short-term gains from the listing.

Objectives of the IPO

The primary purposes of raising funds through this IPO include:

1. Funding Working Capital Requirements: ₹ 2,900 lakh
2. Repayment of Borrowings: ₹ 1,600 lakh
3. General Corporate Purposes: ₹ 1,524.39 lakh

Investment Recommendation

Based on the financial performance and the valuation of the IPO, it appears that the IPO is priced adequately, with the P/E ratios aligning closely with industry standards. Given the steady growth in revenues and profitability, the IPO offers investors an opportunity to invest in a sustainable, globally competitive company. However, the Grey Market Premium (GMP) of ₹ 0 and the full valuation suggest that there may be limited short-term listing gains. Investors looking for long-term value creation may still find this IPO attractive, though it may not be suitable for those seeking quick listing gains.

Conclusion

Super Iron Foundry’s IPO presents an opportunity for investors looking to engage with a sustainable manufacturing leader. However, given the full pricing and the current lack of GMP, those seeking short-term gains may consider waiting for the listing performance. For long-term investors with an interest in industrial sector growth, this IPO may be a viable investment.

The Upcoming IPOs in this week and coming weeks are Super Iron Foundry.

The Current active IPO is NAPS Global.

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