The Rs 412.62 crore Stove Kraft initial public offer (IPO) is set to open for subscription on Monday, January 25, in the price band of Rs 384-385 apiece. This will be the fourth public issue of the calendar year 2021, after the just-concluded Indian Railway Finance Corp IPO, and the ongoing Indigo Paints and Home First Finance Company India IPOs. Stove Kraft IPO comprises fresh issue of shares worth Rs 95 crore and an offer-for-sale (OFS) of up to 82.50 lakh equity shares. The anchor investors portion will open for subscription today, January 22, 2021. Stove Kraft shares were commanding a grey market premium of Rs 101 today. The shares were seen trading at Rs 486, implying an upside of 26 per cent over the IPO price in the grey market.
Abhay Doshi, Founder, UnlistedArena.com — dealing in Pre-IPO & Unlisted Shares — told Financial Express Online that as the brand name ‘Pigeon’ which contributes to 80 per cent sales is under dispute which seems to be a concern. The kitchen appliances manufacturer company, Stove Kraft, operates in a highly competitive market and has turned profitable just two years back. Stove Kraft has posted exceptional figures in the first half of FY21. “Owing to the euphoria in the primary market and small issue size for retail participants this might perform well on the listing. Even though Stove Kraft has posted good numbers in the first half of FY21, it would be more canny to watch the further performance before taking long term decisions,” Doshi added.
The OFS consists of 6.90 lakh equity shares by promoter Rajendra Gandhi, 59,300 equity shares by promoter Sunita Rajendra Gandhi, 14.92 lakh shares by Sequoia Capital India Growth Investment Holdings I, and 60.07 lakh shares by SCI Growth Investments II. Investors can bid for a minimum of 38 equity shares and in multiples of 38 shares thereafter for a minimum amount of Rs 14,630. The book running lead managers to the offer are Edelweiss Financial Services and JM Financial. While KFin Technologies Private Ltd will be the registrar to the issue.
Stove Kraft proposes to utilise the net proceeds from the fresh issue towards repayment or pre-payment of certain borrowings availed by the firm and for other general corporate purposes. Stove Kraft IPO is priced at 34.5x PE on a trailing basis. Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd, said that the company is a kitchen solutions and an emerging home solutions brand. The company is engaged in the manufacture and retail of a wide and diverse suite of kitchen solutions under our Pigeon and Gilma brands, and propose to commence manufacturing of kitchen solutions under the BLACK + DECKER brand, covering the entire range of value, semi-premium and premium kitchen solutions, respectively.
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