Stovekraft IPO is the 4th IPO getting opened for subscription on 25 January, 2021 after IRFC, Indigo Paints and the ongoing HFFC IPO. Stovekraft Limited (ISO 9001:2008 certified) is the largest limited company in the kitchen appliances industry.
Stovekraft Limited have flagship brands, Pigeon and Gilma, which offer premium kitchen solutions through their wide range of products including pressure cookers, non-stick cookware, gas and induction cook tops, mixer grinders, chimneys and hobs among others.
Stove Kraft is coming out with a 100% book building; initial public offering (IPO) of Rs 10 each in a price band Rs 384 – 385 per equity share.75% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds.
The issue comprises an offer for sale (OFS) of up to 6,90,700 shares by the company’s promoter, Rajendra Gandhi, up to 59,300 shares by promoter Sunita Rajendra Gandhi, up to 14,92,080 shares by Sequoia Capital India Growth Investment Holdings and up to 6,007,920 shares by SCI Growth Investments II, and a fresh issue of shares aggregating up to Rs 95 crore. The IPO is expected to fetch Rs 412.62 crore.
Moreover, 15% of the issue will be available for the non-institutional bidders and the remaining 10% for the retail investors. The issue will open for subscription on January 25, 2021 and will close on January 28, 2021.
The shares will be listed on BSE as well as NSE. The face value of the share is Rs 10 and is priced 38.40 times of its face value on the lower side and 38.50 times on the higher side.
The Stovekraft stock was trading at a premium of Rs 100 in the grey market on Friday. However, as the market took a beating for the second straight session, that premium got erased fully, Now all eyes is on Monday i.e. 25 January.
Stove Kraft Ltd has raised a little over ₹185 crore from anchor investors ahead of its initial public offer. It has allotted 48,22,290 shares to 32 anchor investors at ₹385 a piece, which is also the upper end of the price band.
Among the anchor investors are Goldman Sachs India, Nippon Life India Trustee, Bajaj Allianz Life Insurance Company, IIFL Special Opportunities Fund, Integrated Core Strategies Asia Pte Ltd and Sundaram Mutual Fund.
In this post we will not only know about all the details related to Stovekraft IPO, such as Issue size, Issue type, Bid lot, price range, issue date, Cut-off timings but also about the financials step by step.
So, Let us first start by knowing in brief about Stovekraft Limited.
About Stovekraft Limited (SKL):
Stovekraft Ltd. was incorporated in the year 1999, Rajendra Gandhi (Chairman & MD) Neha Gandhi (Director) Rajiv Mehta is the CEO of company. Currently their human capital consists of over 2,000 employees. The companies headquarter is located in Bangalore, Karnataka, India. It’s auditors are Deloitte Haskins & Sells.
It has 651 distributors in 27 states and 5 union territories and 12 distributors for exports and under the Gilma brand, it has 65 stores across 4 states and 28 cities.
It is the largest limited company in the kitchen appliances industry. They offer premium kitchen solutions through their wide range of products including pressure cookers, non-stick cookware, gas and induction cook tops, mixer grinders, chimneys and hobs among others.
The company manufactures a diverse range of kitchen solutions under the brand names Pigeon and Gilma. Stove Kraft also plans to commence manufacturing kitchen solutions under the Black + Decker brand offering a range of cost-efficient, semi-premium, and premium kitchen solutions.
Stovekraft have global presence in the overseas market as well, garnering extensive global presence across Middle East, Kenya, Uganda, Qatar, Sri Lanka, Fiji, Bahrain, Kuwait, Oman and Tanzania. Some other clientele also includes Walmart, Big Lots, and Belk in USA.
The company has the single largest manufacturing facility for kitchen appliances in the country in Bangalore and another manufacturing unit at Baddi, Himachal Pradesh.
Let us now move on to knowing the most important factor that is, the financials of Stovekraft Limited.
Financials Of Stovekraft Limited (SKL):
Stove Kraft, in the first six months of the last financial year, saw 76.9% of its sales come from partner company Pigeon. The company’s sales from southern India accounted for 47.76% of its revenue during the period.
Its revenue from operations stood at Rs 328.8 crore in the April-September 2020 period, up 4.2% from the year earlier. Net profit jumped to Rs 28.8 crore from Rs 4.4 crore a year ago.
In the latest quarter, company has reported Gross Sales of Rs. 6698.61 Cr and Total Income of Rs.6719.88 Cr.
In the financial performance front, for the last three fiscals, Stovekraft ltd. has reported total turnover/net profit (Loss) of Rs. 534.59 cr. / Rs. 12.02 cr. (FY18), Rs. 642.60 cr. / Rs.0.74 cr. (FY19) and Rs. 672.91 cr. / Rs. 3.17 cr. (FY20).
For the six months of FY21 ended on September 30, 2020, it has earned a net profit of Rs. 28.78 cr. on a turnover of Rs. 329.51 cr. For the first half of FY21, the company has not shown any tax liability, which is a quite surprising.
Stovekraft Limited (SKL) Peers Comparison:
As per the offer documents, SKL has shown TTK Prestige, Hawkins Cookers and Butterfly Gandhimati as its listed peers. They are currently trading at a P/Es of around 56.95, 48.15 and 464.73 (as on January 21, 2021).
The IPO is priced at 34.5 times PE on a trailing basis while peers TTK Prestige and Hawkins Cookers are currently trading at 61 times and 47.5 times, respectively.
In the last three fiscals, SKL has posted an average earning per share (EPS) of Rs.- (0.21) and an average Return on net worth (RoNW) of 1.46%. The issue is priced at a price to book value (P/BV) of 7.42 based on its net asset value NAV of Rs. 51.89 as on September 30, 2020, and at a P/BV of 4.99 based on post-IPO NAV of Rs. 77.14 (based on upper price band).
Considering annualized FY21 earnings the asking price it at a P/E of around 21.8, but based on FY20 earnings, the asking price is at a P/E of around 396.91 and is at negative P/E based on last three fiscals negative average. Hence one can say the issue is aggressively priced.
The company had an installed annual production capacity of 3.84 crore units, with capability to manufacture products in the pressure cookers, non-stick cookware, LPG stoves, mixer grinders and induction cooktops categories. The Baddi facility has an installed capacity of 0.28 crore units per annum, with capability to manufacture products such as LPG stoves.
Stovekraft IPO Details:
Objects of the Issue:
Stove Kraft Limited proposes to utilize the net proceeds from the fresh issue for repayment/prepayment, in full or part, of certain borrowings availed by it and general corporate expenses.
Percentage Holding:
Promoters 74.62%
Non-Institutions 25.38%
Frequently Asked Question (FAQ):
1.What Is The Symbol For Stovekraft Limited?
Ans: The Symbol for Stovekraft is STOVEKRAFT.
2.When Stovekraft IPO Coming?
Ans: The Issue Period for Stovekraft IPO is 25-Jan-2021 to 28-Jan-2021.
3. Post Modification Period For Stovekraft IPO?
Ans: The Post issue Modification Period for IPO is 29-Jan-2021 (10.00 A.M. to 11.00 A.M.).
4. What Is The Cut-off Time Period For UPI Mandate For Stovekraft IPO?
Ans: The Cut-off time for UPI Mandate Confirmation is 29-Jan-2021(upto 12:00 PM).
5. What Is The Issue Type For Stovekraft IPO?
Ans: The Issue Type is 100% Book Building.
6.What Is The Price Band For Stovekraft IPO?
Ans: The Price (Band) Range for Stovekraft IPO is Rs.384 to Rs. 385 per equity share.
7. What Is The Lot Size For Stovekraft IPO?
Ans: The Bid Lot i.e. Minimum Order Quantity (lot size) for Stovekraft IPO is of 38 Equity Shares and in multiples thereof 38 Equity Shares.
8. Who Are The Book Running Lead Managers For Stovekraft IPO?
Ans: The Book Running Lead Managers are, Edelweiss Financial Services Limited,JM Financial Limited
9. What Is The Face Value For Stovekraft IPO?
Ans: The Face Value is of Rs. 10 whereas The Tick Size is of Rs.1
10. What Is The IPO Market Timings For Stovekraft IPO?
Ans: The IPO Market Timings is 10.00 a.m. to 5.00 p.m.
Apart from above points:
The Maximum Subscription Amount for Retail Investor is Rs. 2,00,000
The Maximum Bid Quantity for QIB Investors 58,94,636 equity shares in multiple of 38 Equity Shares
The Maximum Bid Quantity for NIB Investors 26,80,976 Equity Shares in multiple of 38 Equity Shares
The Name of the Registrar KFIN Technologies Private Limited
The Address of the Registrar Selenium Tower-B Plot 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally, Hyderabad 500 032 Telangana, India
The Contact person name number and Email id – M Murali Krishna, +91 40 6716 2222, stovekraft.ipo@kfintech.com
Important Things To Keep In Mind Before Applying For IPO’s:
- Try to fill for the same IPO online from different DP ID i.e. if in your family have more than 1 account you can possibly get the allocation done in case of over subscription.
- You should have a good knowledge of the sector and the company you are planning to invest.
- Analysis of the company’s balance sheet is very crucial. A clear understanding of the company’s future projects and vision is very necessary to know whether it will have a sustainable future.
- Investment decision has to be taken carefully and not in a hurry.
- Read as much as you can about the company, its objectives for launching the IPO, its past history in business and its futures prospectus.
- Don’t go for hype in the news, your analysis should be based on facts rather than gossips and rumors.
- Many IPOs are oversubscribed. What this means is that the demand for shares is much higher than the shares available for sale. In such a situation, it is no surprise that many investors fail to get any shares allotted to them. This is why it is advisable to apply for IPO shares on the last day of bidding. This way, one can have a good estimate on how large the subscription will be. Also, in that case, one should bid for just one lot and not unnecessarily lock up their capital.
Conclusion:
The Global Kitchen Appliances Market is expected to touch $253.4 billion by 2020, registering a CAGR of 6.4% during the forecast period 2014-2020. As the rising demand of kitchen appliances is not limited to a particular section of society the growth is inevitable. The pros for Stovekraft are:
- One stop shop for well recognized kitchen solutions brands
- One stop shop for well recognized kitchen solutions brands
- Strong manufacturing capability
- Consistent focus on quality and innovation
Having said that, on account of the pandemic-imposed lockdown and other related measures by GoI, SKL’s manufacturing facilities in Bengaluru and Baddi were shut down for 42 days and 34 days, respectively.
Cons, Risks and concerns:
The company spent Rs 49.31 million, Rs 119.64 million, Rs 316.26 million, Rs 227.01 million and Rs 161.73 million, on its business promotion and advertisement expenses during the six month periods ended September 30, 2020. September 30, 2019 and for Fiscals 2020, 2019 and 2018, respectively. They may need to cut it down a bit.
The company relies heavily upon third-party OEMs for the sourcing of some of its products. For the six month periods ended September 30, 2020 and September 30, 2019 and Fiscals 2020, 2019 and 2018, such traded products contributed 19.21%, 29.82%, 27.59%, 31.63% and 31.50%, respectively, to its total revenues.
Apart from this, Retail business is also subject to seasonal volatility.
Therefore, it is always advisable to go through Stovekraft Limited – DRHP to know in detail about the company.
Applying for Stovekraft IPO is quite simple, you just need to check with your broker as most of the stock broker in India provide you the platform to apply directly through their portal instead of ASBA process or from bank.
The only thing which should be bothering you is the research you did before applying for the IPO. Investing in IPO is risky as well as profitable. Having said that you also need to keep in mind important things mentioned above before applying to IPO’s as the risk is always involved.
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Note: Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only and intended to give information. All investments are subject to risks, which should be considered prior to making any investments. The above details are compiled from information available on public platforms. These are not buy or sell recommendations.
