HM Electro Mech Limited is preparing for its initial public offering (IPO) from January 24 to January 28, 2025, with an aim to raise approximately ₹27.74 crores. The IPO will consist of a fresh issue of equity shares priced between ₹71 and ₹75 each, with a face value of ₹10. The company specializes in turnkey projects involving the supply, installation, testing, and commissioning of pumping machinery, alongside operation and maintenance services for water supply schemes.
₹5
₹75
₹81.00
Expert Opinions
Market sentiment for the HM Electro Mech IPO is cautiously optimistic, reflecting growing investor interest in companies focused on infrastructure and water management solutions. HM Electro Mech has demonstrated strong company fundamentals, with revenue growth from ₹62.03 crores in FY2022 to ₹101.67 crores in FY2023, showcasing its effective operational strategy and market demand for its services. However, potential risks include dependency on government contracts, which may be subject to policy changes, and competition from established players in the sector.
The IPO is expected to have a price-to-earnings (P/E) ratio that aligns well with industry standards, alongside a return on net worth (RoNW) of approximately 24.96%, indicating a fair valuation. From a long-term investment perspective, HM Electro Mech is well-positioned to benefit from increasing investments in infrastructure projects.
Investor Considerations
Investors considering the HM Electro Mech IPO should evaluate several important factors. Company performance and fundamentals show a significant revenue increase, from ₹62.03 crores in FY2022 to ₹101.67 crores in FY2023, alongside a net profit of ₹6.01 crores, indicating strong operational efficiency. The sector outlook is favorable, particularly in water management and infrastructure, supported by increasing government investments.
The IPO valuation reflects a return on equity (ROE) of 28.52%, return on capital employed (ROCE) of 36.75%, and a debt-to-equity ratio of 0.27, suggesting financial stability and effective capital management. Growth prospects are promising, with plans for expanding service offerings and enhancing operational capabilities. However, potential risk factors include dependency on government contracts and competition within the industry. A long-term investment horizon is advisable, as HM Electro Mech aims to leverage favorable trends in the infrastructure sector for sustained growth and profitability.
| Date | GMP | Trend |
|---|---|---|
| 30 Jan 2025 18.01 | ₹5 | Down |
| 29 Jan 2025 10.29 | ₹15 | --- |
| 28 Jan 2025 15.34 | ₹15 | Down |
| 27 Jan 2025 10.39 | ₹20 | --- |
| 25 Jan 2025 11.36 | ₹20 | --- |
| 24 Jan 2025 12.26 | ₹20 | --- |
| 23 Jan 2025 11.26 | ₹20 | --- |
| 22 Jan 2025 11.08 | ₹20 | Up |
| 21 Jan 2025 12.19 | ₹00 | --- |
FAQs
The Grey Market Premium showed strong accuracy in predicting HM Electro Mech’s listing performance. While the GMP of ₹5 predicted a modest premium of 6.67% over the issue price, the stock delivered a similar gain of 8%. With a minimal prediction error of 1.25%, the GMP effectively captured both the direction and approximate magnitude of the listing gains, proving to be a reliable indicator in this case.
HM Electro Mech IPO Current GMP is ₹5.
HM Electro Mech IPO Expected Returns is 6.67%.
HM Electro Mech IPO estimated listing price is ₹80.