Thinking Hats Entertainment Solutions Limited (THES), India's leading Entertainment and Experiential Marketing Company, launched its IPO on September 25, 2024, with overwhelming interest from investors. By the end of the first day, the IPO had been subscribed 15.98 times, indicating robust demand for this ₹15.08 crore issue. This book-built issue comprises a Fresh Issue of 34.29 lakh shares and will be listed on the NSE SME exchange.

The share price band for the Thinking Hats Entertainment Solutions IPO is set between ₹42 and ₹44 per equity share. Retail investors need to invest a minimum of ₹1,32,000 for a lot of 3,000 shares, while High-Net-Worth Individuals (HNIs) are required to invest in a minimum of 2 lots, amounting to ₹2,64,000. The subscription period closes on September 27, 2024, and the shares are expected to be listed on the NSE SME on October 03, 2024.

Grey Market Premium (GMP) is currently indicating potential gains of 54% - 60%, with the GMP ranging between ₹20 to ₹26. While the Grey Market Premium reflects the demand and supply in an unorganized market, investors should treat it cautiously as it does not always align with the actual listing price on the stock exchange. The Grey Market Premium is mentioned for educational purposes only.

Financial Overview of Thinking Hats Entertainment Solutions:

The financial performance of Thinking Hats Entertainment Solutions has been promising over the past few years. The company’s revenue for FY24 was ₹2,670.12 lakhs, compared to ₹2,227.80 lakhs in FY23, and a substantial ₹11,245.20 lakhs in FY22. The EBITDA for these respective fiscal years was ₹499.58 lakhs (FY24), ₹299.93 lakhs (FY23), and ₹54.04 lakhs (FY22), indicating steady growth in profitability.

For FY24, the Profit After Tax (PAT) was recorded at ₹309.16 lakhs, up from ₹200.79 lakhs in FY23 and ₹37.21 lakhs in FY22. These figures demonstrate consistent improvement in the company’s financial health, showcasing strong business fundamentals.

In terms of valuations, Thinking Hats Entertainment Solutions is offering its IPO at a pre-issue EPS of ₹3.57 and a post-issue EPS of ₹2.47. The pre-issue P/E ratio stands at 12.32x, while the post-issue P/E ratio is 17.81x, which aligns closely with the industry average P/E ratio of 16.00x. Additionally, the company boasts a Return on Capital Employed (ROCE) of 29.37% and a Return on Equity (ROE) of 28.11%, reflecting solid operational efficiency and profitability.

The lead manager for the issue is Horizon Management Private Limited, with MAS Services Limited serving as the registrar. Giriraj Stock Broking Private Limited will act as the market maker for this IPO.

How to Check Thinking Hats Entertainment Solutions IPO Allotment:

The IPO allotment is expected to be finalized on September 30, 2024. Investors will be able to check their allotment status on the Registrar’s website by following these steps:

Navigate to the IPO allotment status page.

Select Thinking Hats Entertainment Solutions Limited IPO from the dropdown list.

Enter your Application Number, PAN, or DP Client ID.

Submit the details to view your allotment status.

Once the allotment is confirmed, investors can decide whether to hold or sell based on the company’s performance and market conditions.

Objectives of the IPO:

The funds raised through the Thinking Hats Entertainment Solutions IPO will be allocated toward several critical business goals:

₹200.00 lakhs will be used for repayment or prepayment of loans that the company has availed.

₹840.00 lakhs is earmarked for working capital funding, ensuring the company can scale its operations effectively.

The remaining proceeds will be utilized for general corporate purposes, helping the company maintain liquidity and improve its operational capabilities.

Should You Apply for Thinking Hats Entertainment IPO?

Given the company’s strong financials, industry growth potential, and attractive Grey Market Premium, the Thinking Hats Entertainment Solutions IPO presents a promising opportunity for listing gains. The IPO review highlights a well-balanced risk-reward profile for investors, making it an appealing option for both short-term listing gains and long-term investment.

Investors looking to diversify their portfolios with exposure to entertainment and experiential marketing may find this IPO a suitable addition. However, as with all investments, due diligence and risk management are crucial.

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