Abha Power and Steel IPO: Date, Price & GMP

Abha Power and Steel IPO-Complete Overview

Abha Power and Steel IPO under the SME IPO category is a fixed price issue of Rs.38.54 crore by Abha Power and Steel Limited, incorporated in 2004. The company is primarily engaged in iron and steel casting foundries, largely in crafting and fabricating fully finished products across all possible grades of iron and steel.

The range of products the company offers includes mild steel in all grades, spheroidal graphite cast iron, manganese steel, stainless steel, and low and high alloy castings high in chromium and nickel (high CR and high Ni). HRCS and WRCS, single finished casting weights of 0.5kg to 6 tonnes. The range of products offered by the company contains more than 1000 different types of products.

The company has two foundries; SG Iron Foundry and Steel Foundry situated side by side in the manufacturing plant at Silpahri Industrial Area, Bilaspur, Chhattisgarh, which is approximately 319,200 sq. ft. The manufacturing facility is ISO 9001:2015 certified for the design, development, manufacture, and supply of all iron and steel forgings and casting assemblies for steel and power cement projects, parts for Indian Railways SGCI fittings, all kinds of Adaptors, Valve castings, and other such castings, etc. As of March 31, 2024, the total installed capacity of the plant stood at 14,400 metric tonnes per annum (“MTPA”).

Abha Power and Steel IPO Overview

This Abha Power and Steel IPO date is 27 November 2024, and its ‘initial public offering’ will end on 29 November 2024. 

The Rs.38.54 crore new SME IPO comprises a combination of fresh issues of 41.39 lac Shares (Rs.31.04 Cr) and an offer for sale (OFS) of 10 lac Shares (Rs.7.50 Cr). 

This upcoming IPO date is from November 27 to November 29, 2024. Abha Power and Steel IPO Price is Rs.75 for each Share. 

The expected IPO listing date is Wednesday, 04 December 2024, and listing at NSE and SME.

To open a demat account and apply for the IPO Click Here

Company Financial

The company’s revenue fell by -6% and PAT increased by 170% during FYs ending 31 March 2024 and 31 March 2023.

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Revenue Bifurcation

The revenue bifurcation for various activities is shown below:

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Sector-wise Revenue Breakdown  

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Industry-wise Revenue Breakdown  

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Geography-wise Revenue Breakdown  

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Sales-wise Revenue Breakdown Between

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State-wise Revenue Breakdown (For the period ended October 15, 2024)

 

The Objective of the Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Financing the capital project to upgrade and modernize Bilaspur, Chhattisgarh's manufacturing facilities to increase the range of products it produces.

• Financing the company's operating cash needs.

• General corporate purposes.

 

 

Peers of Abha Power and Steel Ltd.

 

Note:-

The basic EPS of the peers is for the financial year ended on 31 March 2024.

Evaluation

The Abha Power and Steel Limited IPO price is Rs.75 for each Share.

Evaluation of P/E Ratio

Considering the FY ended 31 Mar 2024 with an EPS of Rs.2.62 from the last year, the resulting P/E ratio is 28.65x.

Considering the weighted EPS of Rs.1.55 for the last three years, the P/E ratio is 48.40x.

Comparative Analysis With Listed Peers

The average P/E Ratio of the industry is 26.65.

 

 In simple words, the P/E ratio of this IPO (28.65x), compared with the industry’s average P/E of 26.65x, has an overvaluation (on a P/E ratio basis only). Hence the price of the Share seems aggressively priced for the investors when considered based on the average P/E ratio of the industry.

 

IPO's Strengths 

• A varied product mix with a significant emphasis on personalized goods.

• A well-equipped manufacturing facility.

• A strategically placed manufacturing facility.

• A captive power plant.

• A varied clientele and enduring relationships with our clients; • Accreditations and quality assurance.

• A seasoned management group with a track record of successfully managing and implementing projects.

 

IPO’s Weaknesses

• A significant part of the company’s revenue is generated through an overreliance on Indian railways.

• All activities are carried out in one location which greatly restricts the ability to expand geographically.

• Operationally, reliance on manual processes tends to limit productivity and room for growth.

• A small size of a workforce can create difficulties when it comes to company growth or higher demand levels.

• Intense rivalry in the market of steel products from the more established and big competitors.

 

Abha Power and Steel IPO GMP

Abha Power and Steel Limited IPO GMP today has not started yet.

IPO Timetable (Tentative)

The IPO opening date is from November 27 to November 29, 2024, with allotment on December 02, refund initiation on December 03, and listing on December 04, 2024.

 

Abha Power and Steel IPO Details 

The IPO with a Face Value of Rs.10 per share offers a total issue size of 5,139,200 Shares (Rs.38.54 Cr).

 

Abha Power and Steel IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (1600 Shares) amounting to Rs.1,20,000 and in multiples thereof, while for HNI investors, the minimum Lot is 2 (3200 Shares) amounting to Rs.2,40,000.

 

IPO Reservation (% of Net Issue)

 

Promoters And Management of Abha Power and Steel Ltd.

• Subhash Chand Agrawal.

• Satish Kumar Shah.

• Ankit Agrawal.

• Atish Agrawal.

• Leela Devi Agrawal.

• Sunflower Commotrade Private Limited.

Abha Power and Steel IPO Lead Managers

• Horizon Management Private Limited.

Dividend Policy

The company has not paid dividends in the last five FYs.

Conclusion

The initial public offering of Abha Power and Steel Limited consists of a combination of new shares and an offer-for-sale where the shares are priced at Rs.75 per share targetting an amount of Rs.38.54 crores. Although the company has notable strengths in product diversity and manufacturing capabilities, an overdependence on Indian Railways and fierce rivalry raises some red flags. The P/E ratio suggests a small premium relative to the industry average. Investors must balance growth prospects against applicable risks before deploying funds.

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

DISCLAIMER:

DISCLAIMER: NOT any buy or sell recommendation. No investment or trading advice is given. The content is purely for educational and information purposes only. Always discuss with an eligible financial advisor before investing. 

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