Aeroflex Industries is coming up with an IPO that would open for subscription on August 22, 2023. Aeroflex Industries is manufacturer and supplier of environment friendly metallic flexible flow solutions products. Should you invest in Aeroflex Industries IPO or avoid? In this article we would provide details, dates, positive factors, risk factors and do Aeroflex Industries IPO review.
Also Read: 5 Consistent Performing Largecap Stocks for 2023
Aeroflex Industries IPO Details
| IPO Opening Date | 22-Aug-23 |
| IPO Closing Date | 24-Aug-23 |
| IPO Listing Date | 01-Sep-23 |
| Issue Type | Book Built Issue IPO |
| Face Value | ₹ 2 per equity share |
| IPO Price band | ₹ 102 to ₹ 108 per equity share |
| Lot Size | 130 Shares |
| Min Order Quantity | 130 Shares |
| Listing at | BSE and NSE |
| Total Issue Size | ₹. 351 Crores |
| Fresh issue | ₹. 162 Crores |
| OFS | ₹. 189 Crores |
About Aeroflex Industries Ltd
They are manufacturers and suppliers of environment friendly metallic flexible flow solution products. It includes braided hoses, unbraided hoses, solar hoses, gas hoses, vacuum hoses, braiding, interlock hoses, hose assemblies, lancing hose assemblies, jacketed hose assemblies, exhaust connectors, exhaust gas recirculation (EGR) tubes, expansion bellows, compensators and related end fittings collectively known as flexible flow solutions catering to global as well as domestic markets.
They export its products to more than 80 countries including Europe, USA and others.
For Fiscals 2023, 2022 and 2021 its exports were ₹ 2,171.80 million, 2,035.59 million and 1,171.15 million which constituted 80.60%, 84.53%, and 80.90% of its revenue from operations respectively.
They supply its products to a wide spectrum of industries for controlled flow of all forms of substances including air, liquid and solid. For the Fiscals March 31, 2023, 2022 and 2021, they served total 723, 606 and 538 customers out of which they served 217, 190 and 169 customers across 51, 49 and 43 countries respectively and 506 , 416 and 369 domestically.
Aeroflex Industries Ltd Financials
Here are the financials of the company.
| Financial Year ending / Period ending (Amt in Crores) | ||||
| Particulars | FY20 | FY21 | FY22 | FY23 |
|---|---|---|---|---|
| Assets | 157.2 | 161.6 | 183.4 | 214.0 |
| Revenue | 144.9 | 144.8 | 241.0 | 269.5 |
| Profit After Tax | 4.7 | 6.0 | 27.5 | 30.2 |
| Profit % | 3.24% | 4.15% | 11.42% | 11.19% |
| Net Worth | 52.7 | 58.7 | 86.2 | 114.1 |
| Total Borrowing | 63.5 | 53.1 | 39.1 | 45.0 |
Objects of the Issue
Aeroflex Industries IPO size is ₹ 351 Crores that contains OFS and fresh issue.
While OFS amount of ₹ 189 Crores goes to selling share holders, the fresh issue of ₹ 162 Crores would be used for full or part repayment and/or prepayment of certain outstanding secured borrowings (including foreclosure charges, if any) availed by the company, funding working capital requirements of the company, and general corporate purposes and Unidentified Inorganic Acquisitions.
How is Aeroflex Industries IPO Price Valuation?
Its IPO price band is ₹ 102 to 108 per share
- If we consider last year FY23 EPS of ₹ 2.64, P/E ratio works out to be 41x
- If we consider Last 3 Years weighted EPS of ₹ 2.21, P/E ratio works out to be 49x
- There are no listed peers who are in similar business, hence we cannot ascertain whether the Aeroflex Industries IPO Price is under priced or over priced. However consider 41x to 49x, the issue price is fully priced.
Aeroflex Industries IPO Allotment & Listing Dates
| IPO Opens on | 22-Aug-23 |
| IPO Closes on | 24-Aug-23 |
| Basis of Allotment | 29-Aug-23 |
| Initiation of Refunds | 30-Aug-23 |
| Credit of Shares to Demat | 31-Aug-23 |
| Listing Date | 01-Sep-23 |
| Cut-off time for UPI mandate confirmation | 24-Aug-23 |
Aeroflex Industries IPO GMP
We could not see any information about GMP.
Aeroflex Industries IPO – Positive Factors to invest
- Company is a global flexible flow solutions provider operating in addressable market, catering to diverse industry segments.
- With export oriented business model, it is the primary manufacturer of flexible flow solutions (Make-in-India, Make-For-World) with no listed peers with advanced manufacturing facility and R&D infrastructure.
- Company is in the business that has high entry and exit barriers with experienced and dedicated senior team across key functions.
- Have strong financials – both revenue and margin growth in the last 3-4 years.
Aeroflex Industries IPO – Risk or Negative Factors
- IPO proceeds include OFS too where such money goes to selling share holders and company would not get anything.
- They export its products to various countries and the export operations of its company contribute more than 80% of revenue from operations (out of which export to USA constitutes 28%). They may be subject to significant import duties or restrictions of the relevant jurisdictions. Its inability to comply with related requirements may have an adverse effect on its business and results of operations.
- They are in the usual course of business do not enter into long-term contracts with suppliers for its raw materials. They are dependent on China for a significant portion of raw material suppliers, loss of any major suppliers increase in the cost of raw material that can effect its business and results of operations.
- Its business is dependent and will continue to depend on its single manufacturing facility, and they are subject to certain risks in that behalf. Any slowdown or shutdown in its manufacturing operations could have an adverse effect on the business, financial condition and results of operations.
- Investors should read all risk factors from RHP.
Also Read: 5 Low Risk High Return Stocks for long term investment
Aeroflex Industries IPO Review – Should you Apply or not?
You might be wondering whether this IPO is good or bad for investment. Should you invest or avoid?
- Company is a global flexible flow solutions provider operating in addressable market, catering to diverse industry segments. It has posted strong growth in financials both in terms of revenue and margins. Its IPO price is fully priced.
- On the other side, the OFS portion of the IPO goes to selling share holders and company would not benefit anything. Majority of the company revenue comes from exports where there are geo-political risks.There are general risk factors which investors should read and understand from the RHP.
- Investors with high risk tolerance can consider investing in such IPOs.
Discover more from Myinvestmentideas.com
Subscribe to get the latest posts sent to your email.
I have a question pls.I have been applying for IPOs through ASBA,at cut-off rate for minimum quantities, If i increase the quantity, would my chances of allotment improve ?
No