The IPO of Stove Craft, a company that manufactures kitchen appliances in India, has received good response from the Pigeon brand name. Stove Craft has subscribed 3.7 times till the last day of IPO bidding. Retail investors have subscribed to this IPO 15.7 times so far. At the same time, it has been subscribed 2.13 times by non-institutional investors. But the post placed for Qualified Institutional Buyers (QIB) is currently subscribed by only 47%. The QIB portion must be at least 90% subscribed for an IPO to be successful. The IPO has so far received bids for 2.17 crore equity shares, while its issue size is 58.94 lakh equity shares.
Let us tell you that Stove Craft has launched this IPO to raise around 413 crores. Stove Craft has fixed the issue price for this IPO at Rs 384-385 per share. The lot size of this IPO is 38 shares and retail investors can apply for a maximum of 13 lots. Let us tell you that the company has raised Rs 185 crore from 32 anchor investors. The company launched this IPO on 25 January.
Funds will be used here
The company has issued fresh shares worth Rs 95 crore for this IPO. At the same time, the company’s promoters and investors have issued 82.50 lakh equity shares through Offer for Sale (OFS). The company will use the funds raised through this IPO to pay down debt of Rs 76 crore and the remaining amount will be spent on meeting general corporate needs. Edelweiss Financial Services and JM Financial were appointed lead managers for this IPO.
What is the opinion of brokerage firms?
Brokerage firm Angel Broking says that the company’s brand value, margins and returns are lower than its rivals Prestige and Hawkings. As such, the brokerage firm has given it neutral ratings. The brokerage firm said that Stove Craft placed the share price in this issue at 34.5 times based on the price to earnings ratio. Whereas, its rivals TTK Prestige are trading at 61.0x and Hawkings at 47.5x. The issue is 301.5 times based on FY2020. Profit margins of the company have improved due to cost cuts in the first half of FY2021. Because of this, brokerage firms were not so enthusiastic about this IPO.
Pigeon and Gilma are the hallmarks of stove craft
The promoter of this company, Rajendra Gandhi, issued 6,90,700 equity shares for this IPO. At the same time, Sunita Rajendra Gandhi issued 59,300 equity shares and Sequoia Capital India 14,92,080 equity shares. At the same time, SCI Growth Investments II has issued 60,07,920 equity shares. Let us tell you that the Stove Craft company makes and sells kitchen appliances, pressure cookers and cooktops etc. under the brand name Pigeon and Gilma.