Shree OSFM E-Mobility IPO Date, Price, GMP, Review December 2023
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Shree OSFM E-Mobility IPO Date, Price, GMP, Review December 2023
Shree OSFM E-Mobility IPO: Shree OSFM E-Mobility Limited is a Pune-based manufacturer of electric vehicles, primarily focusing on three-wheeled e-rickshaws and e-loaders.They operate in the rapidly growing Indian electric vehicle market, estimated to reach $150 billion by 2030.
Shree OSFM E-Mobility IPO Key Details:
Dates:
Open: December 14, 2023
Close: December 18, 2023
Listing (tentative): December 21, 2023, on NSE SME
Offer Size: ₹24.60 crore (fresh issue of 37.84 lakh shares)
Price Band: ₹65 per share
News and Developments:
Subscription Update: As of December 15, 2023, the IPO saw good initial response with:
Retail category subscribed 3.99 times.
Overall subscription at 3.50 times.
Grey Market Premium (GMP): Trading at a slight premium of ₹2-3 per share as of December 17, indicating cautious optimism.
Analyst Opinions: Views are mixed, with some recommending caution due to the fragmented nature of the segment and high valuation compared to FY24 earnings. Others see potential in the company’s focus on last-mile connectivity and EV adoption growth.
Shree OSFM E-Mobility Securities Offered:
This is a pure equity share offering. No bonds or other instruments are being issued. The company is raising fresh capital by issuing 37.84 lakh new shares.
Investor Category Reservation:
Category Percentage Allocation Retail Individual Investors (RII) 35% Qualified Institutional Buyers (QIB) 50% Non-Institutional Investors (NII) 15%
Minimum Lot Size and Investment Amount:
Minimum Lot Size: 2,000 shares.
Minimum Investment Amount: ₹130,000 (2,000 shares * ₹65 per share).
Note: For HNI/NII investors, the minimum investment is 2 lots (4,000 shares) or ₹260,000.
Additional Information:
This is a fixed-price IPO, meaning the offer price is set at ₹65 per share.
You can apply for the IPO through your broker or through the designated ASBA platforms of your bank.
Shree OSFM E-Mobility Company Profile:
Early Beginnings and Operations:
Established in 2015, Shree OSFM E-Mobility started as a manufacturer of automotive components.
In 2018, they pivoted to electric vehicles, focusing on three-wheeler e-rickshaws and e-loaders.
Currently, they have two manufacturing facilities in Pune with a total capacity of 60,000 units per year.
Their primary operations are spread across Maharashtra, Gujarat, and Madhya Pradesh, but they aim to expand pan-India.
Market Position and Brands:
They hold a small but growing share in the fragmented Indian e-rickshaw market, estimated to be worth over ₹20,000 crore.
Their main brand is “OSFM E-Mobility,” marketed under the tagline “Sustainable Solutions for Last Mile Connectivity.”
They haven’t yet established prominent sub-brands or subsidiaries.
Competitive Advantages and Unique Selling Proposition (USP):
Focus on last-mile connectivity: caters to a vital segment with high demand for affordable and efficient e-vehicles.
Vertical integration: own production facilities for key components, ensuring cost control and quality.
Product differentiation: offer customized e-rickshaws and e-loaders based on specific customer needs.
Strong distribution network: have established dealership relationships across their target markets.
Challenges and Potential Risks:
Intense competition: operate in a crowded market with numerous established players.
Dependence on government policies and subsidies: government support plays a crucial role in EV adoption.
Limited financial resources: compared to larger peers, their capital base is relatively smaller.
Overall: Shree OSFM E-Mobility occupies a niche space in the growing Indian e-vehicle market. While it faces stiff competition, its focus on specific segments, vertical integration, and customization offer potential advantages. However, its limited financial resources and dependence on government policies create uncertainties for investors.
Shree OSFM E-Mobility Financials:
Revenue Growth: The company has demonstrated impressive revenue growth, with YOY (Year-over-Year) increases of 85% in FY22 and 168% in FY23 (estimated). This surge reflects rising demand for their e-rickshaws and e-loaders.
Profitability: Profitability remains moderate, though improving. They recorded a PAT (Profit After Tax) of ₹309.09 lakhs in FY23, compared to ₹162.78 lakhs in FY22. Net margins remain around 3-4%.
Debt Levels: The company currently has minimal debt, with a debt-to-equity ratio of approximately 0.10. This provides them with financial flexibility and potential for future borrowing.
Key Financial Ratios (FY23 estimated):
P/E Ratio: Based on the issue price of ₹65 and estimated EPS (Earnings Per Share) of ₹2.94, the P/E ratio stands at 22.1.
Debt-to-Equity Ratio: As mentioned earlier, it stands at a healthy 0.10.
Industry Benchmarks:
P/E Ratio: The average P/E ratio for established electric vehicle companies in India is around 30-40. Shree OSFM’s lower P/E could signal potential, but also reflects its smaller size and lower profitability.
Debt-to-Equity Ratio: Industry benchmarks vary, but a ratio below 1 is generally considered favorable, which Shree OSFM achieves comfortably.
Future Growth Prospects and Earnings Drivers:
Growing e-vehicle market: The Indian e-vehicle market is expected to see consistent growth in the coming years, driven by government policies, rising fuel prices, and increasing focus on sustainability. This presents a significant opportunity for Shree OSFM.
Expansion plans: The company plans to expand production capacity and enter new markets, which could significantly boost revenue and earnings.
Product diversification: Exploring new e-vehicle segments beyond e-rickshaws and e-loaders could diversify their offering and attract new customers.
Challenges and Risks:
Intense competition: The fragmented market has numerous players, and competition for market share is fierce.
Dependence on government policies: Continued government support for e-vehicle adoption is crucial for the company’s success.
Profitability concerns: Sustaining and improving profitability while scaling up will be key for long-term sustainability.
Objectives of the Issue:
Shree OSFM E-Mobility has outlined three main objectives for its IPO:
Funding the purchase of passenger vehicles: This includes acquiring new e-rickshaws and e-loaders to meet the growing demand and expand their fleet.
Meeting working capital requirements: The capital will be used to manage day-to-day operations, purchase raw materials, and improve operational efficiency.
General corporate purposes: This could involve research and development activities, marketing initiatives, brand building, and potential acquisitions.
Alignment with Growth Strategy:
These objectives clearly align with Shree OSFM’s future growth strategy:
Expansion: Acquiring new vehicles directly supports their goal of increasing production capacity and entering new markets.
Efficiency: Addressing working capital needs allows them to streamline operations and potentially reduce costs.
Future Opportunities: Utilizing funds for general corporate purposes provides flexibility for strategic investments, R&D, and future acquisitions, all of which can contribute to long-term growth.
Additional Considerations:
The amount raised (₹24.60 crore) might seem modest compared to larger players in the electric vehicle market. However, for a relatively young company like Shree OSFM, it can be a significant boost for achieving their near-term growth goals.
The dependence on IPO funds for vehicle acquisition raises questions about their current capital structure and future financing plans.
Shree OSFM E-Mobility IPO: Lead Managers and Registrar
Lead Managers:
First Overseas Capital Limited (FOCO): FOCO is a licensed merchant banker with experience in managing small and medium-sized enterprise (SME) IPOs. Some recent SME IPOs they handled include Devyani International Limited and Uniphos Enviro Care Limited. While they have experience in managing similar offerings, their track record in terms of post-listing performance hasn’t been consistently robust.
Registrar:
Bigshare Services Private Limited: Bigshare is a SEBI-registered entity acting as a registrar for various types of capital market issuances, including IPOs. Their role in the Shree OSFM E-Mobility IPO involves maintaining shareholder records, handling allotment and refund processes, and facilitating share transfers. Their expertise ensures smooth execution of these crucial aspects of the IPO.
Shree OSFM E-Mobility IPO: Grey Market Premium
Current GMP: As of October 26, 2023, the GMP for Shree OSFM E-Mobility IPO stands at ₹2-3 per share. This indicates a slight positive sentiment in the grey market, with investors willing to pay marginally more than the issue price of ₹65 per share.
Comparison with Recent Listings:
Compared to recent SME IPOs, this GMP is moderate. Recent listings like Akashdeep Metals and Crafts saw GMPs reaching ₹10-15 per share, while others like Erisson Auto Parts Limited had negative GMPs.
The relatively subdued GMP for Shree OSFM E-Mobility could be due to several factors, including its smaller size, limited track record, and presence in a competitive market.
Factors Influencing GMP:
Demand and supply dynamics: High demand for the shares in the grey market can push up the GMP, while excess supply can exert downward pressure.
Company fundamentals: Strong financial performance, future growth prospects, and prominent investors can boost confidence and lead to a higher GMP.
Market sentiment: Overall market conditions and investor appetite for IPOs can also influence the grey market premium.
News and analyst reports: Positive news coverage and favorable analyst opinions can strengthen the GMP, while negative developments can have the opposite effect.
Potential Impact on Listing Price:
A sustained positive GMP can indicate rising investor interest and potentially lead to a higher listing price than the issue price. However, it is important to remember that the grey market is unofficial and its performance doesn’t guarantee the actual listing price.
A negative GMP suggests weaker demand and could result in a listing price below the issue price. Nevertheless, other factors like institutional investor participation and market conditions can also play a role in determining the final listing price.
Potential Risks to Consider Before Investing in Shree OSFM E-Mobility IPO:
Market Volatility:
The Indian stock market can be volatile, and unforeseen economic or political events could negatively impact the IPO performance and overall value of the shares.
Industry Headwinds:
Intense competition in the fragmented e-rickshaw market could erode margins and limit Shree OSFM’s market share.
Dependence on government policies and subsidies for e-vehicle adoption creates external risks beyond the company’s control.
Rising battery and raw material costs could put pressure on profitability.
Company-Specific Challenges:
Limited track record as a publicly traded company creates uncertainty about their future performance and ability to deliver on growth plans.
The relatively small size of the IPO fundraising compared to industry giants might limit their competitive edge and expansion capabilities.
Dependence on IPO funds for vehicle acquisition raises concerns about future financing needs and potential debt burden.
Financial Health Concerns:
While debt levels are low, profitability remains moderate, and significant improvement is needed to justify the current valuation.
The high P/E ratio compared to industry benchmarks could indicate potential overvaluation, increasing investment risk.
Red Flags for Investors:
Short operating history makes it difficult to assess long-term business sustainability.
Inconsistencies in past bottom lines raise concerns about future profitability.
Limited product diversification exposes them to potential market shifts within the e-rickshaw segment.
Shree OSFM E-Mobility IPO: DRHP (Draft Red Herring Prospectus)
Also read: How to Apply for an IPO?
Conclusion :
Shree OSFM E-Mobility shows promise in the booming Indian e-vehicle market, with impressive revenue growth, minimal debt, and expansion plans. However, intense competition, modest IPO funds, and profitability concerns necessitate caution. Thorough research and due diligence are crucial before investing.
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India’s Best 4 E-Auto Rickshaws: Price, Mileage & More
In the ever-evolving landscape of sustainable transportation, E-Auto Rickshaws have emerged as the undisputed champions, claiming an impressive 83% share of the electric vehicle market in India. With approximately 1.5 million e-rickshaws traversing the streets and a monthly addition of 11,000 new units, it's evident that these eco-friendly vehicles have not only captured the market but are steering it towards a greener and more efficient future.
For those navigating the vast array of options in the E-Auto Rickshaw market, here's an invaluable guide to the top four contenders reshaping the Indian electric mobility scene.
E-Trio Tuoro | Mileage – 157 km/Charge | Price – ₹2.94 Lakhs
Efficiency Unleashed: The E-Trio Tuoro stands out for its exceptional cost-effectiveness and efficiency. With a consistent top speed of 50 km/h and an impressive range of 157 km per charge, it caters to small and medium-sized businesses with three versatile variants – flatbed, half-loader, and full-loader. The Tuoro's expansive cargo space of 550 kg positions it as the prime choice for enterprises engaged in cargo transportation, promising significant reductions in operational expenses and enhanced profitability.
ETO BULKe Plus | Mileage – 148 km/Charge | Price – ₹3.76 Lakhs
Smart Logistics Redefined: The Bulke Plus takes the lead in the logistics sector with intelligent technology for remote monitoring and tracking. Offering savings of up to 1 Lakh per annum, it surpasses cargo vehicles with a certified operating range of 148 km. The Bulke Plus boasts a robust 9.4 kWh Lithium-Ion battery, ensuring a substantial operating lifespan of 80,000 kilometers. With ergonomic seating, noiseless cabins, and aerospace-grade aluminum frames, it sets new standards for safety, stability, and comfort.
ETO Trilux 1.0 | Mileage – 148 km/Charge | Price – ₹3.27 Lakhs
Safety Meets Performance: The TriLux holds ICAT certification and integrates smart IoT-based technology for tracking, ensuring top-notch performance with a robust 6.4 kWh AC induction motor. Prioritizing safety, it features a 2350 mm wheelbase for enhanced stability, a sturdy side door, and a rear bumper designed for crash protection. With a focus on visibility and braking efficiency, the TriLux emerges as a premium electric passenger vehicle with unparalleled safety features.
Electeca Express | Mileage – 70 km/Charge | Price – ₹1.75 Lakhs
Versatility Unleashed: Well-suited for various cargo and transportation needs, the ELECTECA Express stands out with a load capacity ranging from 300 to 400 kg. Powered by an 800 W BLDC motor and a Lead Acid battery, it ensures a comfortable ride with features like hydraulic absorbers, leaf spring shock absorbers, and a spacious deck. Its innovative battery design and sturdy construction make it a reliable choice for cargo loads ranging from 800kg to 1000kg.
Conclusion: In the dynamic landscape of sustainable transportation, these E-Auto Rickshaws not only offer eco-friendly alternatives but also redefine efficiency, cost-effectiveness, and safety standards. From the business-oriented E-Trio Tuoro to the tech-savvy ETO BULKe Plus, safety-focused ETO Trilux, and versatile Electeca Express, each vehicle caters to diverse needs, contributing to a cleaner environment and a more prosperous society. As we celebrate the one-year mark of these innovative vehicles dominating the market, they serve as a beacon of hope for a greener and more sustainable future in India's bustling streets.
To read more, click here.
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