Brief Summary
Alright folks, this YouTube video by Sunday Investing is all about breaking down the IPO scene from the 5th week of July. They're looking at a bunch of IPOs, both SME and mainboard, and giving their take on whether they're worth your money. Remember, this ain't qualified advice, just friendly chatter, so do your own research!
- They cover seven IPOs in total, two SMEs and five mainboard listings.
- They discuss key factors like company financials, growth potential, and risks.
- They give their personal opinions on whether they'd apply for each IPO and why.
Opening Remarks
The host kicks things off by setting the stage for a busy IPO week. They've got a whole bunch of IPOs that have already closed, and even more are about to open. They lay down the ground rules: this is just a casual chat among friends, not official financial advice. They encourage everyone to do their own homework before investing. They plan to cover two SME IPOs and five mainboard IPOs, saving the most interesting ones for last.
Kaytex Fabrics (SME)
Kaytex Fabrics, incorporated in 1996, is a fast-fashion textile manufacturer selling clothes under the brands Russia, KEX, and Derbaras. Sachin jumps in to give the lowdown: it's a 30-year-old Punjab-based business now run by the second generation. They're into fabric manufacturing and processing, with a focus on digital printing. They operate across three segments: brand enabler (supplying fabrics to brands like Reliance), own brands (women's ethnic wear), and non-branded (supplying to wholesalers). They've got a growing digital printing segment and have even started exporting. Financials look good, but there are risks like overstocking and competition. Sachin says if you've got idle funds after the main boards, it might be worth a look. The host, however, says he'd personally avoid it due to the many mainboard choices available.
Laxmi India Finance (Mainboard)
Laxmi India Finance, an NBFC incorporated in 1996, offers MSME loans, vehicle loans, and construction loans. They've got a decent AUM and their book looks well-maintained. Mayank explains that they're a Jaipur-based A-rated NBFC with most of their branches in Rajasthan. Their asset quality is better than their peers, and their net interest margin is healthy. The IPO includes both a fresh issue and an offer for sale. Mayank feels the pricing is a bit on the higher side, but there's some scope for listing gains. He suggests those with excess funds can try their luck. The host notes the market negativity around the issue and the sector in general, making listing gains look difficult.
B.D. Industries (SME)
B.D. Industries, set up in 1984, makes rotationally molded plastic products like fuel tanks and hydraulic tanks. Sachin mentions they're based out of Pune and have transitioned from trading to manufacturing plastic components for the automotive sector. They've got multiple plants, but utilization is low. Financials show a big jump due to the consolidation of a subsidiary. Sachin couldn't find much info on why the margins have gone up. Risks include high inventory and underutilized capacity. Sachin says if the asking price was lower, it could have been considered, but for now, he's skipping it.
Sri Lotus Developers (Mainboard)
Sri Lotus Developers, incorporated in 2015, develops residential and commercial properties in Mumbai, focusing on redevelopment projects. The host finds this company tricky and almost too good to be true. He'd personally avoid it because it seems to be coming at the peak of the real estate boom. The company focuses on redevelopment projects in the luxury segment, which tends to be asset-light. The promoter has a lot of experience. The company claims to have no sales expenses and no RERA litigations, which the host finds hard to believe. Financials show insane IITA margins. He feels there's a key man risk and the margins are unsustainable. He also points out that the anchor book didn't have a lot of interest. While the GMP is brilliant, he's not super bullish on the company in the long term.
NSDL (Mainboard)
NSDL, incorporated in 2012, is a SEBI-registered market infrastructure institution acting as a security depository. Tanmay explains that NSDL is India's largest depository in terms of active instruments and market share. NSDL has three core functions: maintaining allotment and transfers, facilitating asset servicing, and providing transaction services. CDSL is driven by retail investors, while NSDL is more into institutional clients. NSDL payments bank revenue is 722 crores but PAT is just 2 crores. Tanmay feels CDSL should get a premium over NSDL due to its high growth and retail focus. He'd apply for listing gains but isn't considering it for the long term. The host will also be applying, expecting it to be fully subscribed.
Aditya Infotech (CP Plus) (Mainboard)
Aditya Infotech manufactures and provides video security and surveillance products under the brand name CP Plus. Rohit explains that they're India's largest video security company with a 21% market share. They also sell the Chinese brand Dahua. They sell CCTV cameras, video recorders, and other surveillance products. The government has introduced the STQC certification, which is good for CP Plus but will stop their Dahua business. Rohit finds this business expensive and isn't very bullish. The host will be targeting this IPO, expecting a lot of people to be waiting for NSDL.
M&B Engineering (Mainboard)
M&B Engineering, incorporated in 1981, is in the business of pre-engineered buildings (PEB) and self-supporting roofing systems. Tanmay explains that they provide complete turnkey solutions, including project designing, engineering, and installation. They've executed a lot of projects and serve many customers. The company has a good order book. Tanmay feels the valuations are extremely juicy and it's a highly overweight apply from his end. The anchor book was top-notch. The host likes the business and the sector and will probably apply to this one.
Closing Remarks
The hosts wrap up the session, summarizing their thoughts on the various IPOs. They didn't cover a couple of SME IPOs due to the sheer number of issues to look at. They give a sneak peek into next week's IPO lineup and plan to do a consolidated space covering multiple issues. They thank everyone for joining and remind them to subscribe to the YouTube channel.
