The retail component of the Venus Pipes & Tubes IPO booked 3.36 times and was subscribed 1.87 times on day one

The retail component of the Venus Pipes & Tubes IPO booked 3.36 times and was subscribed 1.87 times on day one The IPO of stainless steel pipes and tubes manufacturer Venus Pipes and Tubes was oversubscribed 1.87 times on day one, with investors bidding for 66.38 lakh shares versus the IPO size of 35.51 lakh. A day before the deal opened, the business received Rs 49.62 crore from three anchor investors, decreasing the offer size from 50.74 to 35.51 lakh shares.

IPO: Price Band and Size

The Venus Pipes IPO price band has been set at Rs 310-326 per equity share. The business is selling 50.74 lakh equity shares in the public offering. It would cost Rs 165.35 crore in total. It is planned that its shares be listed on both the NSE and the BSE.

IPO GMP Today

According to IPO Watch, Venus Pipes & Tubes' shares are now trading on the grey market at a premium of Rs 25 over the upper band of Rs 326. This means that today's Venus Pipes & Tubes IPO GMP is Rs 10 lower than yesterday's, resulting in a 7.6% listing gain. The grey market shares are currently selling at Rs 351 each.

About Venus Pipes

The IPO, which is an entirely new issue of shares, is expected to raise Rs 165.41 crore for the firm. It will use the revenues to pay for the hollow pipe project and satisfy working capital requirements. Venus Pipes has been manufacturing stainless steel tubular goods in two categories for over six years: seamless tubes/pipes and welded tubes/pipes. It has one factory at Dhaneti, on the Bhuj-Bachau highway (Kutch, Gujarat).

This IPO has been given an avoid rating by Marwadi Financial Services due to the company's negative operational cash flows and regional concentration of sales (three states contributing more than 90 percent to the domestic revenues).

According to the brokerage, the company will list at a P/E (price-to-earnings) of 28.00x and 21.03x with a market cap of Rs 661.7 core, based on FY21 and FY22 (annualised) earnings per share of Rs 11.64 and Rs 15.50 on a post-issue basis, respectively, whereas peers Jindal Saw and Ratnamani Metals & Tubes are trading at P/E of 5.99x and 31.74x, For the fiscal year 2020-21, Venus Pipes made a profit of Rs 23.63 crore on revenue of Rs 309.33 crore, compared to a profit of Rs 4.13 crore on revenue of Rs 177.81 crore the previous year. Profit was Rs 23.6 crore for the nine months ending December 2021, on revenue of Rs 276.77 crore.

DISCLAIMER

The views expressed are strictly of the author. The contents of this article are solely for informational purpose and for the reader’s personal non-commercial use. It does not constitute professional advice or recommendation by Author or Studycafe. Neither the author nor Studycafe and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.