Danish Power Limited is set to launch its Initial Public Offering (IPO) from October 22 to October 24, 2024, aiming to raise approximately ₹197.90 crores. As the largest SME IPO of the year, it features a price band of ₹360 to ₹380 per share for a fresh issue of 52.08 lakh equity shares. Established in 1985, Danish Power specializes in manufacturing various types of transformers, including those used in renewable energy projects like solar and wind farms.
₹240
₹380
₹570
Expert Opinions
The Danish Power IPO is generating positive market sentiment, reflecting strong interest in the SME segment, particularly in the renewable energy sector. The company’s strengths include its established reputation as a transformer manufacturer, supplying high-quality products to key players like Tata Power and ABB India. This positioning enhances its credibility and market reach.
However, potential risks and challenges include dependence on a limited number of customers and the competitive landscape within the manufacturing sector. In terms of valuation analysis, the IPO price band of ₹360 to ₹380 per share appears attractive, with a return on net worth of 46.36% and a reasonable price-to-earnings ratio of approximately 13.69 to 14.45. The long-term investment perspective is promising, as Danish Power is well-positioned to benefit from increasing demand for transformers in renewable energy projects, making it a potentially rewarding opportunity for investors looking to tap into the green energy transition.
Investor Considerations
Investors considering the Danish Power IPO should evaluate several critical factors. The company performance and fundamentals are strong, with a reported revenue of ₹332.5 crore and a profit after tax of ₹38.07 crore for FY2024, indicating solid financial health. The sector outlook for electrical equipment, particularly in renewable energy, is promising, projected to grow significantly as demand for sustainable solutions increases.
In terms of IPO valuation, the price band of ₹360 to ₹380 per share appears reasonable given the company’s established market position and growth potential. The growth prospects are enhanced by plans to expand manufacturing capabilities and invest in new technologies to meet rising demand. However, potential risk factors include reliance on a limited customer base and competition from larger players in the transformer market. A long-term investment horizon is advisable, as Danish Power is well-positioned to benefit from ongoing trends in renewable energy infrastructure, making it a potentially rewarding opportunity for investors.
| Date | GMP | Trend |
|---|---|---|
| 28 Oct 2024 10.27 | ₹240 | Up |
| 27 Oct 2024 13.31 | ₹230 | Down |
| 26 Oct 2024 11.12 | ₹250 | Down |
| 25 Oct 2024 10.38 | ₹290 | --- |
| 24 Oct 2024 10.48 | ₹290 | --- |
| 23 Oct 2024 19.11 | ₹290 | Up |
| 22 Oct 2024 10.57 | ₹260 | Up |
| 21 Oct 2024 11.12 | ₹210 | Up |
| 19 Oct 2024 18.38 | ₹140 | --- |
FAQs
The Grey Market Premium demonstrated considerable accuracy in predicting Danish Power’s listing performance. The GMP of ₹240 indicated a potential 63.16% premium, while the actual listing delivered a 50% gain. With a relatively small prediction error of 8.06%, the GMP effectively captured both the positive listing sentiment and the approximate magnitude of gains, proving to be a reliable indicator for this IPO.
Danish Power IPO Current GMP is ₹240.
Danish Power IPO Expected Returns is 63.16%.
Danish Power IPO estimated listing price is ₹620.