Toss the Coin is a marketing consulting company focused on providing custom marketing services designed to help businesses grow through creative, responsible, and sustainable operations. Specializing in building go-to-market strategies tailored to the individual needs of clients, Toss the Coin assists businesses in enhancing their brand presence with a modern and innovative approach.

The Toss the Coin IPO is a Book Built Issue totaling ₹9.17 crores, consisting entirely of a fresh issue of 5.04 lakh shares. The subscription period for this IPO opens on December 10, 2024, and will close on December 12, 2024. The allotment date is expected to be December 13, 2024, and the shares will list on the BSE SME platform with the tentative listing date scheduled for December 17, 2024.

The price band for the Toss the Coin IPO is set between ₹172 and ₹182 per equity share. At the upper price of ₹182, the market capitalization of Toss the Coin will be ₹34.39 crores. The lot size for the IPO is 600 shares, which means retail investors will need to invest a minimum of ₹1,09,200. For High-Net-Worth Individuals (HNIs), the minimum investment is 2 lots (1,200 shares), which amounts to ₹2,18,400.

Grey Market Premium and Listing Expectations

The Grey Market Premium (GMP) for the Toss the Coin IPO is currently reported as ₹0, signaling no expected listing gains at this time. The absence of any significant GMP indicates a lack of demand in the grey market. It's important to note that GMP is a speculative metric and does not guarantee listing gains. Traders and investors should exercise caution when relying on this metric, as trading on the grey market is unregulated and speculative.

Toss the Coin Financial Performance

The company has shown consistent growth in its revenues over the last three years. For the fiscal years ending 2024, 2023, and 2022, the revenues from operations were ₹495.53 lakhs, ₹483.48 lakhs, and ₹299.85 lakhs, respectively. The EBITDA for FY 2024 stood at ₹154.15 lakhs, which was lower than the ₹245.12 lakhs in FY 2023 but higher than the ₹144.69 lakhs in FY 2022. The profit after tax (PAT) for FY 2024 was ₹109.85 lakhs, down from ₹178.29 lakhs in FY 2023 but up from ₹104.98 lakhs in FY 2022.

For the Toss the Coin IPO, the pre-issue earnings per share (EPS) is ₹7.93, while the post-issue EPS is ₹5.81. The pre-issue price-to-earnings (P/E) ratio is 22.95x, and the post-issue P/E ratio is 31.31x, compared to the industry P/E ratio of approximately 30x, suggesting that the IPO is priced in line with industry standards.

The company’s Return on Capital Employed (ROCE) for FY 2024 is 34.32%, and the Return on Equity (RoE) for FY 2024 is 27.22%, both indicating a solid return on investments and an efficient use of capital.

Objectives of the IPO

The funds raised through the IPO will be used for the following purposes:

1. Microservices Application Development – ₹294.73 lakhs will be allocated to funding capital expenditure for developing a microservices application.
2. New Office Openings – ₹120.00 lakhs will be used for funding capital expenditure to open new offices.
3. Working Capital Requirements – ₹200.00 lakhs will be allocated to meet the company’s working capital needs.
4. General Corporate Purposes – The remaining funds will be used for general corporate expenses.

Investment Recommendation

Despite the company’s consistent revenue growth and strong financials, the IPO price seems relatively high given its post-issue P/E ratio of 31.31x, which is higher than the industry average of 30x. The Grey Market Premium also reflects no expected listing gains. Given this information, we recommend avoiding this IPO for both short-term listing gains and long-term investments.

While Toss the Coin shows promise in the marketing consulting space, the current valuation appears to be at a premium, and the lack of GMP suggests limited market enthusiasm. Investors looking for higher returns or undervalued opportunities should look elsewhere.