Prince pipes & fittings IPO – Should you apply? Analysis must know before applying to the IPO.

prince pipes ipo analysis

Prince pipes and fittings IPO Issue Details:

IPO date:                      18 Dec – 20 December 2019
Issue Size:                    500 Cr
Offer Price:                  Rs 177 – Rs 178 Per Equity Share
Market Lot:                  84 Shares & multiples
Exchange Listing:       BSE, NSE

IPO Timelines (tentative dates):

Allotment & refund:    27 Dec
Credit to Demat:           30 Dec
Listing on Exchange:   31 Dec

Company Promoters: Jayant Shamji Chheda & family

Objective of the Issue: Repayment or prepayment of certain outstanding loans, financing new manufacturing facility, Upgradation of equipment

IPO Registrar: Link Intime India Private Ltd

Company Overview:

  • Incorporated in 1987, Mumbai based Prince Pipes is engaged in manufacturing of polymer pipes and fittings.
  • Brand names: Trubore, Prince.
  • PAN-India presence & products are used for varied applications in plumbing, irrigation, and soil, waste and rain water  management.
  • The company website: https://princepipes.com/

Prince pipes IPO Analysis (Review)

Financial Performance:

prince pipes ipo financials

valuations as on 31st Mar 2019:

1. Earning per share (EPS): 9.26
2. Price to Earning ratio (P/E): 19

Company category:  medium-grower

Company Strength:

  • Strategically multi-located & diversified manufacturing facilities with a core focus on quality.
  • Strong brands in the pipes and fittings segment with over 30 years‘ experience with Pan-India presence.
  • Technical collaboration with a reputed international player to improve quality.
  • Company plans new facility at Telangana, likely to be operational by Dec 2020, implying 28% hike.

Peer Comparison: 

prince pipes ipo peer comparison

Prince Pipes:
Low profit margin
debt higher than peers but will get somewhat down after IPO fund
P/E valuation are okay compare to peers.

Analysis Conclusion:

  • Brand name with PAN-India presence, New facility will increase capacity & thus profit, reducing debt from IPO fund, overall okay P/E valuation compare to peers are plus points.
  • GMP (Grey Market Premium) is around 12 Rs as of 17th Dec. IPO may bring some listing gain or may not as looking at GMP & overall Analysts and investors’ less sentiment for this IPO.
  • You may or may not find usual subscription response as less sentiment but this is actually an opportunity to get allotment for such a overall okay IPO as like Apex frozen food, AU small finance, Polycab IPO etc. You can expect reasonable gain in mid to long run.
  • Considering all the factors, my personal view is ‘Positive’ for mid to long term gain.
  •  BullRun IPO-India Ratings:  3.5 stars (out of 5 Stars)

Prince pipes IPO Allotment Check:

  • how and where to check allotment status (link) :

https://linkintime.co.in/IPO/public-issues.html

Prince pipes Subscription Status:

 

Abbreviations:

EPS – Earning per share
OFS – Offer for Sale
P/E – Price to Earning
RoE – Return on Equity
QIB – Qualified Institutional Buyer
NII – Non-Institutional Investors
RII – Retail Individual Investor

Disclaimer & Conflict of Interest:

The above analysis is based on research of the company and RHP of Prince pipes. You should study more before taking any decision.

Analysis by –  NISM Certified Research Analyst & Investment Advisor.