A new debutant on the markets today – Prince Pipes and Fittings. Sadly, its entry was most certainly like no prince – it got listed on the BSE and NSE at Rs.160 v/s IPO price of Rs.178.
This discounted listing was on expected lines as its IPO got a very tepid response – it was subscribed only 2.21 times.
In our IPO Analysis, we had said, “While topline growth visibility exists in, due to expected 28% capacity hike by FY21, for lower profit margins, company is expecting same valuation multiples as peers today, making the issue fully priced. Company accounts for barely 5% of the Rs. 30,000 crore industry, not giving any pricing power in its hands.
Our conclusion had been - Lower margins vis-à-vis peers, pressing need on promoters for OFS (to clear group debt) and not much being left on the table with respect to pricing make the issue less attractive. Hence, one can give it a skip.