It’s a brand new week, and two new IPOs are opening today. Atlanta Electricals is one of the key IPOs to watch out for on September 22. The Rs 687.34 crore issue is a combination of fresh share issuance along with an ‘Offer For Share’ component too. The company has recently expanded its manufacturing capacity by 2.8x over FY25 and targets increasing it by 33% soon. They are betting big on the continuing robust demand for transformers.
Here are 5 ‘must-know’ details about the Atlanta Electricals IPO that you must carefully consider before deciding to ‘Subscribe’ or ‘Avoid’.
Atlanta Electricals IPO: Issue size, IPO date and offer details
The Rs 687.34 crore Atlanta Electricals IPO is a combination of 0.53 crore fresh share issuances amounting to Rs 400 crore and Rs 287.34 crore offer for sale comprising 0.53 crore shares. You can bid for the IPO between September 22-24 and the issue is priced between Rs 718-754 per share. The book running lead manager for the issue is Motilal Oswal Investment Advisors and MUFG Intime India is the IPO registrar.
Atlanta Electricals IPO: GMP trending higher
The grey market premium for the Atlanta Electricals IPO has been trending higher even before the issue opened. If one tracks the GMP last updated at 10:30 pm on September 21, indicates a steady upward trend. The current GMP is Rs 142, up 18.83%. With the upper end of the price band at Rs 754 per share, the estimated price at which the IPO is expected to list at Rs 896. However, readers must remember that the GMP is the indicative listing price and there is nothing official about it. In many instances, the official listing price is significantly different from the GMP trend.
Atlanta Electricals IPO: Issue objective
The main objective of the Atlanta Electricals IPO is expansion of operations. While the shareholders’ diluting stake will get the funds directly from the OFS, the proceeds of the Rs 400 crore fresh issuance are expected to be used for a whole host of debt repayment and expansion operations.
-Rs 79.1 crore from the IPO proceeds is being earmarked for repayment/prepayment of outstanding borrowings
-The company will use Rs 210 crore from the IPO proceeds for funding working capital requirements of the company.
The remaining Rs 110 crore is expected to be used for general corporate purposes and also for funding the IPO-related expenses.
Atlanta Electricals IPO: Lot size, allotment and listing details
The Atlanta Electricals IPO closes on September 24. The allotment is likely to be finalised on September 25 and the expected listing date is September. However, this is a tentative date as of now. Once the issue is finalised, there will be further clarity on the listing date.
The lot for applying for the Atlanta Electricals IPO is 19. Retail investors can invest for a minimum 1 lot size entailing Rs 14,326 crore (19 shares at the upper price band). For NIIs, the lot size varies between 14 lots to 70 lots, depending on the size of the NII. The investment amount ranges between Rs 2,00,564 for 14 lots and Rs 10,02,820 for 70 lots.
Atlanta Electricals IPO: Analyst views
Most analysts believe that the Atlanta Electricals IPO is ‘Subscribe’ for the longer term. SBI Securities, “ We recommend investors to Subscribe to the issue from a long-term perspective, considering the benefits of expanded capacity to flow during next 2-3 years.” They highlighted that the “overall demand-supply balance in the transformer industry continues to remain skewed in favour of demand due to the robust infrastructure expansion currently underway in the power transmission and distribution sector.”
However, the brokerage house pointed out that “The company has high exposure to State utilities (82% of order book) compared to peers which can lead to higher working capital requirements. Lack of backward integration currently is also likely to keep a lid on the margins. At the upper end of the IPO price band, the IPO is valued at 48.9x FY25 P/E on post-issue capital, which is at a slight premium to the average of the peer set.”