Stove Kraft shares began trading at a premium over the IPO price and were at a market capitalization of Rs 1500 crore
The kitchen appliance manufacturer and home solutions firm, Stove Kraft made its share market debut at Rs 467 per share, a premium of Rs 82 or 21.30% from the issue price on BSE. Stove Kraft became the fourth IPO of the calendar year 2021 to list on exchanges. On National Stock Exchange (NSE), the stock listed at Rs 498 per share, rising 29.35 per cent from the issue price. On listing, the kitchen appliance manufacturer was commanding a market capitalization of Rs 1,500.31 crore. The Rs 412-crore initial public offer (IPO) was subscribed 18 times with non-institutional investors bidding 32.72 times the allocated quota of shares. In the previous session, Stove Kraft shares were seen quoting a premium of Rs 35-40 apiece, over the issue price.
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The issue was opened last week, where investors were offered the shares in a bid lot of 38 equity shares or multiples, priced at Rs 384-385 per share. The initial public offer (IPO), comprised a fresh issue of up to Rs 95 crore and an offer for sale of up to 82.50 lakh equity shares. Stove Kraft caters in the sub-premium and premium segment through its brands such as Pigeon, Gilma, and BLACK + DECKER. The qualified institutional buyers (QIBs) category was subscribed 8 times, non-institutional investors 32.72 times and retail individual investors 26 times.
Analysts at Angel Broking Ltd said that Stove Kraft priced its issue at 34.5x PE on a trailing basis, its peers TTK Prestige and Hawkins Cookers were currently trading at 61.0x and 47.5x respectively. Cost such as travelling, advertisement reduced in H1FY21 due to Covid-19 is going to come back once business comes back to normalcy. Those at KRChoksey Research said that at the upper band of the issue price, Stove Kraft will trade at a Price/EPS multiple of 12.0x of its annualized H1FY21 revenue, which is at a discount to its listed peers like TTK Prestige Ltd (45x), Hawkins Cookers (42.3x), and Butterfly Gandhimathi (284.3x). “We believe that the current price band is undervalued, looking at the growth potential in the company we anticipate listing gains,” they added.
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