Hey there, did you hear about the ASK Automotive IPO? It’s making quite a buzz in the market. The IPO opened for subscription on November 7 and by the end of the first day, it was already 38% subscribed. The subscription will close on November 9, so there’s still time to get in on the action. The retail investors’ portion was subscribed 56% on the first day, while the non-institutional investors (NII) portion was at 41% and the Qualified Institutional Buyers (QIB) portion was at 3%. That’s some serious interest right there!
The IPO price band is set at ₹268 to ₹282 per share, and it’s a book-built issue of ₹834.00 crore. The issue is entirely an offer for the sale of 2.96 crore shares. Now, here’s the juicy part – the Red Herring Prospectus (RHP) has some interesting insights for potential investors. Let’s take a look at 10 key things you should know before diving into this IPO.
First off, the promoters of the company are Kuldip Singh Rathee and Vijay Rathee. And when it comes to industry peers, ASK Automotive has some big names to compete with, including Endurance Technologies Limited, Uno Minda Limited, Suprajit Engineering Limited, and Bharat Forge Limited. These are some heavy hitters in the automotive industry!
Now, let’s talk market share. ASK Automotive’s market capitalisation is ₹5,559 crore and it’s the largest manufacturer of brake-shoe and advanced braking (AB) systems for two-wheelers (2W) in India. They’ve got a whopping 50% market share in fiscal 2023 – that’s no small feat!
The company’s product range is quite diverse, from brake shoe products for 2Ws to AB systems, aluminium lightweight precision (ALP) solutions, wheel assembly, and safety control cables products. They cater to a wide range of vehicles, from two-wheelers to commercial vehicles, and even non-automotive sectors like power tools and outdoor equipment.
When it comes to financials, ASK Automotive has been on the rise. Their revenue increased by 26.78% and profit after tax (PAT) rose by 48.75% between the financial year ending with March 31, 2023, and March 31, 2022. That’s some impressive growth!
But of course, with great potential comes great risks. Over 80% of the company’s operating revenue in the last three fiscal years is tied to the Indian two-wheeler automotive industry. Any unfavourable changes in this industry could have a negative impact on the company. Plus, the availability and cost of raw materials, including aluminium, are crucial to their operations and profitability. It’s not all smooth sailing, that’s for sure.
On the bright side, ASK Automotive has some solid distribution channels. They supply products to all of the top six 2W OEMs in India and have even started commercial supplies to 2W EV OEMs. Their global reach is expanding too, with customers in both the automotive and non-automotive sectors outside India.
So, there you have it – a quick rundown of the ASK Automotive IPO. It’s definitely an exciting opportunity, but as with any investment, it’s important to do your homework and weigh the risks. Who knows, this could be the next big thing in the automotive industry!
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