On May 11, Venus Pipes & Tubes Ltd, a Gujarat-based manufacturer and supplier of stainless steel pipes and tubes, will launch its initial public offering (IPO).
Here are 10 key things to know before subscribing to the issue:
The offering will be available for subscription on Wednesday, May 11th, and will close on May 13th (Friday).
The price band for equity shares with a face value of Rs 10 has been set at Rs 310-326.
This offer at the top end of the pricing band is expected to net the maker of seamless tubes/pipes and welded tubes/pipes Rs 165.42 crore. The offer is a book-built issuance that does not include the promoters’ offer to sell equity shares.
The promoters will sell a total of 50.74 lakh shares, or 16.07 percent of their holdings. Their present 64.27 percent share in the corporation will be reduced to 48.2 percent.
Qualified institutional buyers will receive 50% of the net offer, while retail investors would receive 35% and non-institutional investors will receive 15%.
Objectives of the issue
The net proceeds will be used to fund capacity expansion, technological improvements, operational cost optimization, manufacturing facility support, and backward integration for hollow pipe manufacturing, as well as other general business reasons.
Investors can bid on a minimum lot size of 46 shares, as well as multiples of that. A retail investor can apply for up to 13 lots or 598 shares for Rs 1,94,948 with a minimum investment of Rs 14,996. Retail investors’ maximum bid amount has been set at Rs 2 lakh.
Company profile and the industry
The firm has roughly six years of experience manufacturing stainless steel tubular goods, which are divided into two categories: seamless tubes and pipes and welded tubes and pipes. The firm sells its products under the Venus brand name for use in a variety of industries, including chemicals, engineering, fertilisers, pharmaceuticals, power, food processing, paper, and oil and gas. The firm is one of India’s fastest-growing stainless steel pipe and tube producers.
It has one production factory at Dhaneti (Kutch, Gujarat), on the Bhuj-Bachau route, with a capacity of 10,800 MT per year. It offers its goods both in the United States and internationally. It was exporting to 20 nations as of February 28, 2022, including Brazil, the United Kingdom, Israel, and European Union countries.
The company’s overall income for FY21 was Rs 312.03 crore, up from Rs 179.32 crore the previous year. The year’s net profit was Rs 23.63 crore, up from Rs 4.13 crore the year before. The profit margin increased to 7.57 percent from 2.3 percent the year before. As of April 7, 2022, the company’s total borrowings were Rs 78.19 crore.
Strengths and business strategy
The firm has key worldwide accreditations (quality benchmarking certificates) and product approvals, allowing it to offer goods to 57 Fortune India 500 organisations in the past, in industries such as chemicals, engineering, pharmaceuticals, oil & gas, and others.
Since its foundation, the firm has focused only on the manufacturing of stainless steel pipes and tubes. This provides it with a competitive advantage in the stainless steel pipes and tubes market. This offers the firm the advantage of segment knowledge, giving it a competitive advantage over its competitors.
The company’s products are in high demand across all categories, including new projects, repair and maintenance, and replacement.
Its main business plan is to expand current capacity and capitalise on the Indian government’s ‘Make-in-India’ initiative, which has opted to prohibit international/global bids in government procurement tenders valued up to Rs 200 crore.
Backward integration and cost optimization are two goals it has set for itself. The company intends to expand its export operations into new markets while maintaining operational efficiency through technological improvements.
Promoters and key management personnel
The Chairman, Non-Executive Director, and one of the company’s promoters is Jayantiram Motiram Choudhary.
Megharam Sagramji Choudhary and Dhruv Mahendrakumar Patel are promoters and Whole-Time Directors, while Arun Axaykumar Kothari is the company’s Managing Director and CFO.
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