Abha Power and Steel is set to launch its initial public offering (IPO) from November 27 to November 29, 2024, with a fixed price of ₹75 per share. The company operates in the iron and steel foundry sector, specializing in the casting and manufacturing of customized products across various grades of iron and steel. With two manufacturing plants in Chhattisgarh and an installed capacity of 14,400 metric tonnes per annum, Abha Power aims to raise approximately ₹38.54 crores through this IPO.
₹20
₹75
₹81.90
Expert Opinions
Market sentiment for the Abha Power and Steel IPO is cautiously optimistic, reflecting growing interest in the iron and steel sector amid infrastructure development. Company strengths include a diversified product portfolio with over 1,000 customized offerings, a fully equipped manufacturing facility in Chhattisgarh, and a strong client base, including Indian Railways.
The company reported a remarkable 170% increase in profit after tax, highlighting its operational efficiency. However, potential risks and challenges include raw material price volatility and regulatory changes that could impact operations. The valuation analysis sets the IPO price at ₹75 per share, which appears reasonable given the company’s growth potential. From a long-term investment perspective, Abha Power and Steel is well-positioned to benefit from increasing demand for steel products driven by infrastructure projects.
Investor Considerations
Investors considering the Abha Power and Steel IPO should evaluate several key factors. Company performance and fundamentals indicate a mixed financial landscape, with revenue declining by 6% to ₹51.83 crores in FY24, while profit after tax surged by 170% to ₹3.78 crores, reflecting improved operational efficiency. The sector outlook remains positive, bolstered by increasing demand for steel products driven by infrastructure projects in India.
The IPO valuation is set at ₹75 per share, which appears reasonable given the company’s growth potential and a return on equity of 24.17%. Growth prospects are promising, supported by plans for modernization and an extensive product range catering to multiple industries, including railways and power. However, investors should consider risk factors, such as raw material price volatility and regulatory challenges. A long-term investment horizon is advisable, as Abha Power and Steel is well-positioned to benefit from the expanding infrastructure landscape in India.
| Date | GMP | Trend |
|---|---|---|
| 03 Dec 2024 11.16 | ₹20 | --- |
| 02 Dec 2024 11.11 | ₹20 | --- |
| 01 Dec 2024 11.20 | ₹20 | --- |
| 30 Nov 2024 13.00 | ₹20 | --- |
| 29 Nov 2024 11.01 | ₹20 | --- |
| 28 Nov 2024 10.47 | ₹20 | Down |
| 27 Nov 2024 11.25 | ₹25 | Up |
| 26 Nov 2024 10.48 | ₹00 | --- |
| 25 Nov 2024 11.07 | ₹00 | --- |
| 23 Nov 2024 11.24 | ₹00 | --- |
| 22 Nov 2024 18.03 | ₹00 | --- |
FAQs
The Grey Market Premium showed moderate accuracy in predicting Abha Power and Steel’s listing performance. While the GMP of ₹20 predicted a premium of 26.67% over the issue price, the stock actually delivered a more modest gain of 9.20%. With a prediction error of 13.79%, the GMP correctly predicted the positive listing direction but significantly overestimated the magnitude of gains, demonstrating partial reliability as a directional indicator in this case.
Abha Power and Steel IPO Current GMP is ₹20.
Abha Power and Steel IPO Expected Returns is 26.67%.
Abha Power and Steel IPO estimated listing price is ₹95.