Company and IPO Overview
The company Shera Energy Limited started its operations in 2009, The Company is primarily engaged in the business of manufacturing of winding wires and strips made of non-ferrous metals primarily Copper and Aluminium. Company also manufactures wire rods, wires and tubes of Copper and Brass. These wires, tubes and rods are manufactured in various shapes and sizes as per the requirement of the customers and / or demand in the market. Its product range includes paper covered wires, enamel and fiber covered wires, round wires, rectangular wires, bunched wires, tubes, rods, strips, etc.
Shera Energy Limited is an ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 certified company. The company has well-equipped manufacturing facilities with latest technology plant and machinery for manufacturing and quality control lab within house testing equipment to test the quality of its products. Its finished products undergo a strict quality check to ensure that they are of required quality as per the standards set. Its in-house testing team regulates and monitors the quality, safety and packaging of the products.
Shera Energy Limited is an NSE SME IPO and it is going to raise ₹35.20 crores via IPO. The price band is fixed at ₹55to ₹57 with a market lot of 2000 shares. The company has reserved a quota of 15.84% for NII, 35.74% for Retail Investors and 48.42% for QIB in this IPO.
Financials (rounded off)
Date | Total Revenue (₹ in cr) | PAT (₹ in cr) |
31/03/2020 | 426 | 3.61 |
31/03/2021 | 423 | 5.03 |
31/03/2022 | 525 | 7 |
Objectives of the Issue
· The company is raising the funds in order to meet its working capital requirements and other general corporate purposes.
IPO Details
IPO Date | 07/02/2023-09/02/2023 |
Face Value | ₹10 per share |
IPO Price Band | ₹55-57 per share |
IPO Lot Size | 2000 Shares |
Listing at | NSE SME |
Basis of Allotment | 14/02/2023 |
Credit of Shares in Demat | 16/02/2023 |
Listing Date | 17/02/2023 |
Pre-Issue Shareholding | 66.57% |
Post-Issue Shareholding | 63.51% |
Retail Minimum Lot Size | 2000 shares (₹1,14,000) |
Shera Energy Valuations and Margins:
| FY20 | FY21 | FY22 |
EPS (Rs.) | 1.81 | 2.52 | 3.51 |
P/E | - | - | 15.67-16.24 |
ROCE (%) | 26.47 | 27.4 | 26.78 |
EBITDA (%) | 6.87 | 7.73 | 6.42 |
Important things to note about the company:
This IPO seems to be a mixture of some negatives and positives:-
Positives:
· Revenue is consistent.
· Profit growth is quite good.
Negatives:
· PE based on FY22 earnings is 18.5. Net profit margins are 1.2% on average for the last 3 years. Competitors are trading in the range of 14 to 18 PE. The issue size is very big and the majority of it is OFS. A SME should focus on expansion rather than promoters encashing IPO amount.
· Borrowings are on higher side. Adani is biggest example of over leveraging.
· Profit margin is very thin (only around 1%), though revenue is quite large.
Crisp Insights:
Adani Stocks have made the broader markets weak, hence, any negative news there can severely impact these small IPOs
Grey Market Premium is Rs.11.
The Company received good over-subscription as on 09/02/2023.
Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.
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