Thursday, December 13, 2012

Veto Switchgears IPO

Veto Switchgears and Cables, a company engaged in the manufacture and sale of wires & cables and electrical accessories, has come out with an IPO of Rs 25 crore. Veto Switchgears supplies products under the brands “VETO” and “VIMAL POWER”.

The IPO shall open for subscription on 3 December, 2012 and shall close on 5 December, 2012. The company has fixed the issue price band at Rs 48-50 per share. Bids can be made for a minimum of 3,000 equity shares and in multiples of 3,000 shares thereafter.

The company intends to use proceeds of the IPO for modernisation of existing facility at Haridwar, Uttarakhand (with an outlay of Rs 4.7 crore), financing incremental long-term working capital requirement (with a cost of Rs 15.80 crore), enhancement of brand through advertising and other brand-building activities (with Rs 2 crore), and general corporate purposes. 

Net profit of the company increased 47 percent year-on-year to Rs 7.22 crore and total revenues rose 29 percent to Rs 68.7 crore in the year ended March 31, 2012.

 The equity shares are proposed to be listed on the SME Platform of the NSE - EMERGE. Keynote Corporate Services Limited is the book running lead manager to the issue and Indian Overseas Bank is the co-book running lead manager. Bigshare Services Private Limited is the registrar of the IPO.

Recommendation:

CRISIL has graded 4 to the IPO indicating above average fundamentals. Veto has P/E of about 8x on the pre-IPO EPS. We would recommend this IPO for medium term, though investor should encash any good listing gains.

Subscription:

Veto Switchgears IPO has got subscribed 1.56 times at the close of the IPO subscription..

At the close of the IPO,
QII segment got subscribed by 1.05 times
NII segment got subscribed by 1.47 times
Retail segment got subscribed by 2.06 times

Allotment:

Click here to check Veto Switchgears IPO Allotment Status!

Listing:

Veto Switchgears IPO got listed on 13 December, 2012. The stock opened at Rs 58, 16% above the issue price, which was also the intra-day high, before hitting an intra-day low of Rs 50.30 and finally closing the day at Rs 50.40, just 0.8% above the issue price of Rs 50 per share.


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