IKIO Lighting IPO: IKIO Lighting IPO opened for public subscription today, ie, Tuesday, 6 June, and will close on Thursday, 8 June. The bidding for anchor investors concluded on Monday, wherein the company collected Rs 182 crore. The price band for its public issue at Rs 270-285 per equity share of face value Rs 10 each. At the upper end of the price band, the company’s promoters and shareholders seek to raise Rs 607 crore from the IPO. Ahead of the public issue, IKIO Lighting shares’ GMP rose to Rs 95 per equity share, 33% over the upper end of the share price on offer.
The IPO comprises a fresh issue of shares up to Rs 350 crore and an offer for sale (OFS) component with promoters and shareholders offloading 90 lakh equity shares. The shares are likely to get credited on 15 June, and listed on stock exchanges on 16 June, according to reports.
Should you apply for the IKIO Lighting IPO?
Anand Rathi: Subscribe
IKIO has created its niche in functional decorative lights, commercial refrigeration lighting and recreational vehicles. Its ability to offer end-to-end solutions and its backward-integrated manufacturing have resulted in a strong business model with healthy RoEs despite operating on a smaller base than its peers, which cater mainly to the mass-market needs of leading brands. At the upper IPO price band, the stock trades at 54x 9M FY23 EPS of Rs 5.3.
SBI Securities: Subscribe for long-term
The company has a strong 10-year relationship with its largest customer, Signify (Philips), resulting in consistent growth. By developing new SKUs annually, they ensure customer loyalty and a larger share of their customers’ business. At the upper band, the business is trading at a P/E multiple of 47.8x 9MFY23 annualized EPS. The IPO looks fairly valued across various valuation parameters when compared with its close peers. Investor can SUBSCRIBE the issue for long term investment horizon
Choice Broking: Subscribe
IKIO doesn’t have any peer company having business operations similar to it. The above peer companies are operating in the EMS sector and are considered only for valuation benchmarking. At a higher price band, IKIO is demanding a P/E multiple of 43.6x (to its restated FY22 EPS of Rs. 6.5), compared to the peer average of 94.6x. Based on our FY23E earnings, the demanded P/E is 32.7x, which is at discount to peer’s prevailing TTM P/E multiple of 43.2x. Thus we assign a “SUBSCRIBE” rating for the issue.
(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)