United Heat Transfer Limited, a company with a reputation for excellence in the heat exchanger equipment industry, is launching its IPO on October 22, 2024. The company is seeking to raise ₹29.99 Crores entirely through a fresh issue of 50.84 lakh shares. This IPO is a Book Built Issue, which means that the price will be determined within a specified range, set at ₹56 to ₹59 per share. The minimum lot size is 2,000 shares, and retail investors need to invest a minimum of ₹1,18,000, while High-Net-Worth Individuals (HNIs) have a minimum investment of ₹2,36,000.

The IPO subscription period closes on October 24, 2024, and the allotment is expected to be finalized on October 25, 2024. The shares are set to be listed on the NSE SME platform, with a tentative listing date of October 29, 2024. Swastika Investmart Limited is the book-running lead manager for the issue, and Link Intime India Private Limited will act as the registrar. Swastika Investmart Limited will also serve as the market maker for the IPO.

Financial Metrics and Expert Opinion

United Heat Transfer Limited has demonstrated consistent growth over recent years, with revenues for the four-month period ending July 31, 2024, amounting to ₹2,120.01 lakhs. This follows revenue figures of ₹6,409.55 lakhs in FY24, ₹7,040.15 lakhs in FY23, and ₹4,796.11 lakhs in FY22. The EBITDA for the four months ending July 2024 was ₹527.51 lakhs, and the company posted a profit after tax (PAT) of ₹242.53 lakhs.

Despite these promising numbers, the grey market premium (GMP) for United Heat Transfer Limited's IPO is currently ₹0, suggesting a lack of demand in the grey market. While the company's financial performance has been stable, analysts advise investors to be cautious, particularly for those looking for listing gains. Given the pre-issue price-to-earnings (P/E) ratio of 12.06x and a post-issue P/E ratio of 17.98x, the IPO is fairly priced but does not present immediate opportunities for significant gains. The return on capital employed (ROCE) of 31.77% and return on equity (RoE) of 30.62% are healthy figures, yet the absence of GMP activity indicates limited short-term excitement.

Objectives of the IPO

The proceeds from the IPO are primarily aimed at addressing debt repayment, with ₹573.38 Lakhs allocated for this purpose. Additionally, ₹1,400.00 Lakhs will be used for incremental working capital requirements, while the remainder will be reserved for general corporate purposes. This strategic use of funds is intended to further the company’s growth trajectory by reducing debt obligations and increasing operational efficiency.

How to Check United Heat Transfer Limited IPO Allotment

For investors who have applied for shares in the United Heat Transfer Limited IPO, the allotment status will be available on October 25, 2024. Here’s a step-by-step guide to check your allotment status:

  ▪ Visit the registrar's website.

  ▪ Select United Heat Transfer Limited IPO from the list.

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

  ▪ Submit the details to view your allotment status.

This straightforward process will help investors verify whether they have been allocated shares, so they can proceed with their investment decisions accordingly.

Conclusion

While United Heat Transfer Limited has a solid foundation in the heat exchanger equipment sector and a robust financial history, the lack of grey market activity and the neutral stance taken by analysts suggest that this IPO may not deliver substantial returns in the short term. Retail investors are advised to consider this carefully before participating, as the listing gains potential appears limited at this stage. For long-term investors, the company’s growth prospects are backed by its strong revenue and profit figures, yet the valuation metrics do not indicate significant upside immediately.

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