The initial public offering (IPO) of Global Surfaces Limited will open for subscription on March 13 and close on March 15. Hence, investors will have three days to apply for this IPO. The company has fixed a price band of 133-140 a stock for its IPO and aims to raise it 155 crores from this offer.
Gray Market Premium (GMP). Global Surfaces Ltd is celebrated on 45, according to market sources. Considering the issue band value of 133-140, expected listing price could be 185 (upper band value + GMP).
Market observers said Global Surface Ltd’s IPO is GMP 45, which means that the gray market is expecting that Global Surface Ltd. IPO listing will be around 185 ( 140+ 45), which is almost 32 percent higher than its price band 133-140 per equity share.
However, stock market experts said that GMP is not a perfect indicator about the success or failure of an IPO. He advised investors to scan the balance sheet of the firm and ascertain the sustainability of the business and revenue model of the company. He also said that GMP is a non-regulated number, which is purely speculative.
Global Surfaces Limited reported a total revenue of Rs. 198 crores for the financial year ending March 31, 2022, reporting a net profit after tax 35 crores. For the six months ended September 30, 2022, the company has reported revenue of 99 crores and profit after tax 13.6 crores.
“If we annualize FY23 earnings and consider the fully diluted paid-up equity capital post IPO, the ask price is at a P/E of around 21.84, given the estimated valuation. of 175 and eps 8.01. If we consider FY22 earnings, P/E is at 16.64 considering the estimated listing price of 175 and eps 10.52,” said Manish Khanna, co-founder of Unlisted Assets.
The IPO comprises issuance of 85.20 lakh equity shares and offer for sale of 25.5 lakh equity shares by the promoters – Mayank Shah and Sweta Shah.
The funds raised from the fresh issue will be used to set up the company’s proposed entity – Global Surface FZE – in Dubai.
“Global Surfaces believes that it has a strong opportunity in the international market, hence it is setting up a manufacturing unit in Dubai. In addition, they continue to add new products and designs as well as adopt technology and automation. which will aid growth and enhance operational efficiency,” said brokerage Religare Broking.
On principal risk, the brokerage took note of two points:
1) Highly dependent on a few customers and geography (USA) for revenue.
2) The company does not have any long term arrangement/agreement with the customers or suppliers and this may affect the business operations.
Half of the issue size has been reserved for qualified institutional buyers, up to 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors.
Unistone Capital is the sole book running lead manager to the issue. The equity shares of the company will be listed on the leading exchanges NSE and BSE.
Global Surfaces Limited is engaged in the business of processing natural stones and manufacturing engineered quartz. The company is a wholly owned subsidiary of Global Surfaces FZE, a Dubai based entity engaged in the business of manufacturing engineered quartz. The company has two manufacturing units in Rajasthan.
The views and recommendations given above are of individual analysts or broking companies and not of Mint,
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