Shri Balaji Valve Components LTD IPO- Review, Valuation & GMP

Balaji Valve Components IPO  - Complete Overview

Established in November 2011, Shri Balaji Valve Components Ltd. is a Pune-based company in Maharashtra specialising in the manufacturing of components for valves, including ball, butterfly valves and forged products. Shri Balaji Valve Components operates within the Capital Goods industry.

The company runs two facilities in Pune. The initial plant, located in Bhosari, specialises in forging and heat treatment processes. Meanwhile, the second plant in Chakan, a town within Pune, is dedicated to precision machining.

They create various valve parts like balls, spindles, sleeves, rings, flanges, hoods, shafts, valve bodies, ports, trunnions, spindles, discs, and housings which are used in different valve types. Valves are like switches that play a crucial role in regulating the flow of liquids or gases.These valves are used in India and worldwide, including places like Dubai, Germany, and the US.

As of June 30, 2023, the company has 168 employees and is ISO 9001-2015 certified. They specialise in making ready-to-assemble valve components, using machinery for forging and machining materials. The company prioritises quality and follows standards like PED and NORSOK for its closed die forging products.

Balaji Valve Components IPO Overview

Balaji Valve Components IPO date is slated to be open for subscription from December 27, 2023, to December 29, 2023. This BSE SME IPO follows a book-built-issue IPO.

Balaji Valve Components IPO price is fixed at Rs. 95 to 100 per share. The upcoming BSE SME IPO will be listed on January 3, 2024.

The total issue size of this IPO amounts to Rs. 21.60 CR. Within this total issue, 35% is issued to retail investors, and 15% is issued to other investors.

 

Balaji Valve Components IPO timetable (Tentative)

Events	Date
IPO Opening Date	27 December 2023
IPO Closing Date	29 December 2023
IPO Allotment Date	1 January 2024
Refund initiation	2 January 2024
IPO Listing Date	3 January 2024

 

Balaji Valve Components IPO Details

IPO opening & closing date	27 December to 29 December 2023
Face value	Rs. 10 per share
Issue Price	Rs. 95 to 100 per share per share
Lot Size	1200 Shares
Price of 1 lot	Rs.1,20,000
Total Issue Size	2,160,000 shares (aggregating up to Rs. 21.60 CR)
Offer for sale	shares (aggregating up to Rs. CR)
Fresh issue	2,160,000 shares (aggregating up to Rs. 21.60 CR)
Listing at	BSE SME
Issue Type	Book Built Issue IPO
Registrar	Bigshare Services Pvt Ltd

 

Balaji Valve Components IPO Lot Details

Application	Lot	Shares
Minimum Lot Investment (Retail)	1 lot	1600
Maximum Lot Investment (Retail)	1 lot	1600
Minimum Lot Investment (HNI)	2 lot	3200

Balaji Valve Components IPO Reservation

QIB Shares Offered	50%
Retail Shares Offered	35%
Other Shares Offered	15%

Company Financial

The company's financials for June 30, FY 23, show growth in total assets, revenue, and profit. Compared to Mar 31, FY 22, there's an increase in net worth, reserves, and total borrowings.

(Amount in Lakhs)

Period	Jun 30  FY 23	Mar 31  FY 23	Mar 31  FY 22
Total Assets	5,132.00	5,023.02	3,973.46
Total Revenue	1,654.64	6,294.10	3,906.05
PAT	184.84	643.15	153.47
Net worth	975.66	789.14	144.64
Reserve & Surplus	377.01	790.85	147.70
Total Borrowings	2,879.49	2,877.99	2,799.71

Geographical Wise Revenue Distribution         

The revenue distribution, as a percentage, reveals a substantial portion from India, with contributions from Africa, Asia, North America, South America, and Europe. The total revenue increased from FY 22 to FY 23.

( % age) 

Particulars	Sep 30 FY 23	Mar 31 FY 23	Mar 31  FY 22
India	1300.38	4397.91	2931.64
Outside India
Africa		3.87	4.01
Asia	210.96	1487.84	745.38
North America	87.22	128.69	43.02
South America	17.65	46.37	28.89
Europe	38.43	229.42	153.11
Total	1654.65	6294.10	3906.05

 

Revenue By operations

The company's revenue from operations increased between June 30, FY 23, and March 31, FY 22, with additional income included in the total revenue.

(amount in Lakhs)

Particulars	Jun 30 FY 23	Mar 31  FY 23	Mar 31  FY 22
Revenue from operations	1651.56	6227.42	3885.38
Other Operating Income	3.08	66.68	20.67
Total Revenue from operations	1654.65	6294.10	3906.05

The Objective of the Issue

The company intends to use the net proceeds for the following objectives.

• Investing money in more machines and expanding the plant.

• To meet working capital requirements

• General Corporate Purpose.

 

 

 

Promoters and Management of Balaji Valve Components IPO

1. Laxmikant Sadashiv Kole.

2. Madhuri Laxmikant Kole.

3. Shrinivas Laxmikant Kole. 

Pre-issue Promoter Shareholding	100%
Post-issue Promoter Shareholding	73.53%

 

Balaji Valve Components IPO Lead Managers

• Hem Securities Limited

 

Peers of Balaji Valve Components IPO

No listed companies in India engage in a business similar to theirs, making it impossible to provide an industry comparison.

 

Evaluation

The IPO is priced within the range of Rs. 95 to Rs. 100 per share.

Evaluation of P/E Ratio

- Considering the FY23 EPS of Rs 10.72 from the last year, the resulting P/E ratio is 9.33x.

- Taking into account the weighted EPS of Rs 6.21 for the last three years, the P/E ratio amounts to 16.10x.

Consequently, the IPO Price range at a P/E of 9.33x to 16.10x is considered slightly overvalued.

 

Dividend Policy

The company hasn't paid dividends in past fiscal years. Whether we can pay them in the future depends on factors like profits, past dividend trends, capital needs, legal restrictions, and other relevant considerations evaluated by our Board.

 

IPO's Strengths

1. Integrated Manufacturing Capabilities: Operates from two well-equipped facilities in Pune, Maharashtra, ensuring in-house forging, heating, and machining capabilities. This allows for faster deliveries, superior quality, and cost-effective operations.

2. Experienced Management Team: Led by Promoter and Managing Director Laxmikant Sadashiv Kole, the company benefits from a qualified team with expertise in forging, engineering, and manufacturing of valve components.

3. Diversified Product Portfolio: Offers a comprehensive range of industrial valve components in various sizes, serving diverse industries such as oil and gas, power generation, petrochemical, construction equipment, pharmaceuticals, and food and beverage.

4. Long-Standing Relationships: Maintains enduring relationships with key customers and suppliers, built on commitments to quality, timely delivery, and adaptability. The top 5 customers contribute significantly to the company's revenue.

5. Quality Assurance and Standards: Holds ISO 9001:2015 certification, reflecting a strong commitment to maintaining high-quality standards in manufacturing processes. Strict adherence to customer specifications and rigorous monitoring ensure consistent quality across product segments.

 

 

IPO's Weaknesses

1. Profitability Challenges: Historical losses and uncertainties in predicting future results pose operational risks. Increased expenses for hiring, marketing, and infrastructure could impact profitability.

2. Raw Material Cost Fluctuations: Dependency on specific raw materials poses a risk to pricing and supply. Fluctuations in material costs or supply disruptions may adversely affect business and financials.

3. Customer Dependency: A significant portion of revenue relies on a few key customers, exposing the company to risks associated with potential loss of business. Concentration of business among top customers poses a threat to revenue.

4. Expansion Challenges: Ongoing expansion introduces potential business and financial challenges. New issues such as sales, marketing, and production optimization may impact profitability.

5. Regulatory Compliance Risks: Dependence on regulatory approvals poses challenges. Delays or non-receipt of required approvals may result in cost and time overruns, affecting planned expansions.

 

IPO GMP Today

The Last GMP of Balaji Valve Components IPO was Rs.51.

Conclusion

In summary, Shri Balaji Valve Components Limited, a Pune-based company specialising in valve component manufacturing, is set to launch its IPO from December 27 to December 29, 2023. Priced at Rs. 95 to Rs. 100 per share, the IPO aims to raise Rs. 21.60 crore, with positive financial indicators and a global presence in countries like the US, Germany, and Dubai.

While the IPO valuation is slightly on the higher side according to the P/E ratio, the company's strengths lie in integrated manufacturing capabilities, an experienced management team, a diverse product portfolio, and strong international relationships. Challenges include historical losses, raw material cost fluctuations, customer dependency, and regulatory compliance risks.

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 theDRHP.

 

 

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