Global Surfaces Limited is engaged in processing natural stone and manufacturing artificial quartz. Global Surfaces IPO Launches Subscriptions on the 13thth March 2023. Over the past few years, the company’s revenues and margins have grown steadily.should i invest Global Surfaces IPO? Is this IPO a risky or challenging opportunity to invest in?
Global Surfaces IPO – Key Details
IPO start date | March 13, 23 |
IPO closing date | March 15, 23 |
IPO Listing Date | 23-3-23 |
Kind of problem | Book Build Issue IPO |
face value | 10 rupees per share |
IPO price range | Rs 133 to Rs 140 per share |
lot size | 100 shares |
Minimum order quantity | 100 shares |
list at | BSE and NSE |
total issue size | INR 15.498 billion |
New publication | INR 11.928 billion |
OFS | rupee 3.57 billion |
QIB Shares Offered | 50% or more of the offer |
Offer of NII/HNI shares | 15% or less of the offer |
Retail Stock Offered | 35% or less of the offer |
Global Surfaces IPO Prospectus
Global Surfaces IPO – a deep dive into the company’s business model
We process natural stones and manufacture artificial crystals.
Natural stones are produced by complex geological processes and include granite, limestone, marble, slate, quartzite, onyx, sandstone, travertine, and many other products quarried from the earth.
Natural stone is widely known for its uniqueness, aesthetic appeal, texture, color and composition. No two natural stones are the same.
Synthetic quartz, on the other hand, is an example of an artificial stone used in the countertop industry, which is a composite material made of crushed stone glued together.
How is the company’s financial performance?
Fiscal year end/end (Amt in Crores) | ||||
detail | 2020 | 21st year | 22nd year | September 22nd |
---|---|---|---|---|
Total assets | 128.7 | 159.0 | 236.5 | 280.2 |
Earnings | 165.8 | 179.0 | 198.4 | 99.3 |
Profit after tax | 21.0 | 33.9 | 35.6 | 13.6 |
Profit % | 12.64% | 18.96% | 17.96% | 13.69% |
What is the purpose of the offer?
The company purpose of the offer is for sale and fresh profit. New earnings will be used for the following purposes:
- Investment in its wholly-owned subsidiary, Global Surfaces FZE, to partially cover the capital expenditure requirements to set up a synthetic quartz manufacturing facility in the Jebel Ali Free Zone in Dubai, United Arab Emirates (UAE) .
- General corporate purpose.
Global Surfaces IPO – Valuation Analysis
Its IPO price range is Rs 133 to Rs 140.
Considering last year’s 2022 EPS was Rs 10.52, the PER is 13.3x.
Considering the weighted average EPS of Rs 9.63 over the last three years, the PER is 14.5x.
Annualized assuming an EPS of Rs 8.02 for the six months ended 22nd September, the PER is 17.46 times.
Only one peer is listed. That is Pokarna Limited, which trades at 29.5x P/E. Comparing with a single company is not appropriate. Considering a PER of 13x to 17.4x, we can conclude that the price is attractive.
Global Surfaces IPO – Top Reasons to Invest
Global Surfaces Limited is engaged in processing natural stone and manufacturing artificial quartz.
The company has an extensive product portfolio and multiple designs, and has an established presence in the international market.
The company has experienced steady revenue growth over the past 3 years and 6 months.
Compared to FY2020, corporate profit margins have improved in FY2022. However, the period through September 2022 is likely to see lower profit margins than in previous years.
Global Surfaces IPO – Key Risks and Downsides
On the risk side:
The ongoing impact of the COVID-19 pandemic on businesses is uncertain and likely to continue.
The company depends on a small number of customers for most of its revenue.
The main export destination is the United States, and any adverse developments in this market may affect the company.
Investors should read all internal and external risk factors before investing in this IPO.
Global Surfaces IPO – Review and Conclusion
Global Surfaces Limited is engaged in natural stone processing and man-made quartz manufacturing, with a wide product portfolio and multiple designs. The last few years have seen steady revenue and margin growth. The company’s IPO price is attractive.
On the other hand, the company’s profit margin for the fiscal year ending September 2022 is declining compared to the previous year. The company relies on a small number of customers and globally its footprint is in the United States, which poses risks in the event of unfavorable developments in such markets.
Risky investors can invest in this IPO with a medium- to long-term view.
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