Venus Pipes and Tubes IPO subscribed 2.36 times on day one as retail portion booked 4.1 times

2022-05-28 13:55:41 By : Ms. Linda Huang

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The initial public offering of stainless steel pipes and tubes maker Venus Pipes and Tubes was subscribed 2.36 times on day one as investors bid for 83.96 lakh shares against the IPO size of 35.51 lakh shares.

The company raised Rs 49.62 crore from three anchor investors a day ahead of the issue opening, reducing the offer size from 50.74 to 35.51 lakh shares.

Anchor investors bid at the higher end of IPO price band of Rs 310-326 per share.

Retail investors bid for 4.1 times of the quota, while the portion set aside for non-institutional investors was subscribed 98 percent. Qualified institutional buyers have bid for 36 percent of their total quota of 10.14 lakh shares.

Venus Pipes has reserved half of the total offer for qualified institutional buyers, 15 percent for non-institutional investors, and the remaining 35 percent for retail investors.

Also read - Venus Pipes & Tubes IPO opens today: 10 key things to know

The company intends to mop up Rs 165.41 crore through its IPO which is completely a fresh issue of shares. It will finance its project cost of hollow pipes and meet working capital requirements through proceeds.

Venus Pipes has over six years of experience in manufacturing stainless steel tubular products in two broad categories – seamless tubes/pipes and welded tubes/pipes. It has one plant which is at Bhuj-Bhachau highway, Dhaneti (Kutch, Gujarat).

Marwadi Financial Services has assigned an avoid rating to this IPO as the company has negative operating cash flows and geographic concentration of revenues (three states contributing more than 90 percent to the domestic revenues).

Click Here To Read All Updates on LIC IPO

Considering the FY21 and FY22 (annualised) earnings per share of Rs 11.64 and Rs 15.50 on a post issue basis, the company is going to list at a P/E (price-to-earnings) of 28.00x and 21.03x with a market cap of Rs 661.7 core whereas peers Jindal Saw and Ratnamani Metals & Tubes are trading at P/E of 5.99x and 31.74x, said the brokerage.

Venus Pipes recorded profit of Rs 23.63 crore on revenue of Rs 309.33 crore for the financial year 2020-21, against profit of Rs 4.13 crore on revenue of Rs 177.81 crore in previous year. For the nine months ended December 2021, profit stood at Rs 23.6 crore on revenue of Rs 276.77 crore.

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