Bumper debut | Aeroflex Industries lists at Rs 197, over 82% premium to IPO price

Flexible flow solutions company Aeroflex Industries is a subsidiary of Sat Industries, developing and manufacturing environment-friendly metallic flexible corrugated hoses, assemblies and fittings


Ashish Kacholia-backed Aeroflex Industries made an impressive debut on the bourses, listing at 82.78 percent premium over the issue price of Rs 108. The stock started trading at Rs 197.40 on the BSE and Rs 190 on the NSE.

This was in-line with analysts’ expectations as the company enjoys the first mover advantage, robust subscription demand for IPO, and healthy financial performance with improving debt-to-equity ratio.

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The Rs 351-crore public issue garnered overwhelming response from investors, subscribing 97.11 times during August 22-24. Qualified institutional buyers have bought 194.73 times the reserved portion, followed by high networth individuals, who have bid 126.13 times the allotted quota, and retail investors 34.41 times.

Flexible flow solutions company Aeroflex Industries is a subsidiary of Sat Industries. It develops and manufactures environment-friendly metallic flexible corrugated hoses, assemblies, and fittings.

“We provide critical components for various industries to facilitate smooth flow of solids, liquids and gases. We cater to industries such as steel, oil & gas, fire sprinklers, and solar. We are also looking at EV mobility, semiconductor and new-age sectors as well,” Asad Daud, managing director, Aeroflex Industries said.

As on March 31, 2023, the company had more than 1,700 product SKUs (Stock Keeping Units) in its product portfolio and had exported products to 51 countries. Over 80 percent of its revenue comes from exports.

The financials

On the financial front, the company revenue, EBITDA, and PAT grew at compounded annual growth rate of 36.43 percent, 55.54 percent, and 123.97 percent, respectively, between FY21 and FY23.

In FY23, the company’s EBITDA and PAT margin stood at 20.05 percent and 11.19 percent respectively for FY23.

“At Rs 108, the company’s price-to-earnings ratio stands at 41x. Having a monopoly in the business with no listed peers in India and future expansion plans with decent financials, investors can have a long term perspective on the stock,” noted analysts of various broking houses.

Pravesh Gour, Senior Technical Analyst, Swastika Investmart said, “The company operates in an industry with substantial entry and exit barriers. It plans to expand its global and domestic businesses, and it is investing in new technologies to improve its products, which will drive long-term growth and profitability.”

“Those who have a medium- to long-term perspective can also hold the stock,” he said.

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