ASK Automotive Limited’s IPO is scheduled for November 7, 2023. The company is India’s largest manufacturer of two-wheeler brake shoes and advanced braking systems. This article reviews the details, positive and risk factors of ASK Automotive IPO.
ASK Automotive IPO – Date and Stock Details
| IPO start date | November 7, 2023 |
| IPO deadline | November 9, 23 |
| IPO listing date | November 20, 2023 |
| Type of problem | Book Built Issue IPO |
| face value | 2 rupees per share |
| IPO price range | 268 to 282 rupees per share |
| lot size | 53 stocks |
| Exhibition location | BSE and NSE |
| Total issue size | Rs. 834 million |
About ASK Automotive Co., Ltd.
The company is India’s largest manufacturer of two-wheeler brake shoes and advanced braking systems, with a combined market share of approximately 50% in FY23, combining OEM and branded independent aftermarket production. There is.
For more than 30 years, the company has provided safety systems and critical engineering solutions with in-house design, development and manufacturing capabilities.
Its products are powertrain agnostic and compatible with internal combustion engine OEMs as well as electric vehicles. The company’s brand “ASK” is recognized as the top brand in India in terms of 2W IAM software production volume in 2023.
ASK Automotive Limited – Finance
| Fiscal year end/period end (amount in billions) | ||||
| Period ends | March 31, 2021 | March 31, 22 | March 31, 23 | June 30, 2023 |
|---|---|---|---|---|
| assets | 948.25 | 1,105.56 | 1,281.21 | 1,443.34 |
| revenue | 1,567.77 | 2,024.26 | 2,566.28 | 657.55 |
| Profit after tax | 106.20 | 82.66 | 122.95 | 34.83 |
| net worth | 622.23 | 631.91 | 643.77 | |
| reserves and surplus | 581.54 | 591.73 | 604.34 | 639.03 |
| Total loan amount | 54.02 | 119.78 | 231.82 | 268.03 |
ASK Automotive IPO valuation
- The IPO price range is between Rs 268 and Rs 282 per share.
- Considering last year’s FY23 EPS of Rs 6.18, the P/E ratio is 46 times.
- Considering the last three years’ weighted EPS of Rs 5.32, the P/E ratio is 53x.
- Listed companies such as Bharat Forge have a P/E ratio of 99 times (highest), Suprajit Engineering has a P/E ratio of 17 times (lowest), and the industry average P/E ratio is 58.3 times. Therefore, the IPO price range of 46x to 53x P/E is fully priced.
ASK Automotive IPO – Positive factors
- The company is an established manufacturer of safety systems and critical engineering solutions for India’s largest original equipment manufacturers.
- The company has a robust production model driven by R&D and design, with an emphasis on advanced materials knowledge to customize systems and products based on customer specifications and design lighter and more precise products. I am.
- A company with a wide range of systems and solutions for the EV and ICE space, with technology and innovation-driven manufacturing processes and long-standing customer relationships with OEM players in India and globally.
- Its financial and profit indicators indicate growth and efficient use of capital.
ASK Automotive IPO – Negative or risk factors
- The purpose of the IPO is OFS only. In an offer for sale (OFS), the IPO proceeds go to the selling shareholders and the company does not benefit.
- A significant portion (more than 80%) of its operating revenue comes from the two-wheeler segment in India. Any adverse impact on the two-wheeler segment could adversely affect its business.
- They rely on their top 3 customers who contribute more than 00% of their revenue. The loss of such customers could affect the company’s operations and finances.
- The Company’s operations and profitability are highly dependent on the availability and cost of raw materials, including aluminum, and disruptions to the timely and adequate supply of raw materials or fluctuations in raw material prices could adversely affect the Company’s operations. It may have a negative effect.
- They rely on third parties for the supply of raw materials and do not have firm commitments or exclusive supply arrangements with any of our companies.
- Investors should consider all internal and external risk factors. Automotive-related IPO Ask RHP.
ASK Automotive IPO – Should you invest?
- The company is an established manufacturer of safety systems and critical engineering solutions for India’s largest original equipment manufacturers. The company has experienced significant revenue growth in the past.
- On the other hand, corporate profit margins are on the decline (6.7% in FY2020, 4% in FY2021, and 4.8% in FY2023). The risk is high because the top three customers contribute more than 50% of his revenue. All IPO proceeds go to selling shareholders, and the company does not benefit.
Investors should consider all the positive aspects and risk factors (internal and external risk factors due to RHP) before investing in such IPOs.
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. I have been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
