Arvind and Company Shipping Agencies IPO: Setting Sail in Prosperity

Introduction:

The maritime sector is abuzz with excitement as Arvind and Company Shipping Agencies brings forth its IPO, adding a fresh wave of capital amounting to Rs 14.74 crores. The entire issue comprises 32.76 lakh fresh shares, setting the stage for a new chapter in the company's growth trajectory. The IPO bidding window, open from October 12, 2023, to October 16, 2023, has attracted significant attention. With the allotment finalized on Thursday, October 19, 2023, the shares commenced trading on NSE SME on October 25, 2023.

Pricing and Investment Landscape:

Priced at ₹45 per share, the IPO offers a chance for investors to partake in the growth journey. The minimum lot size for retail investors is set at 3000 shares, requiring a minimum investment of ₹135,000. High Net Worth Individuals (HNIs) had the option to invest in 2 lots (6,000 shares), totaling ₹270,000.

Market Performance Overview:

As of December 15, 2023, Arvind and Company Shipping Agencies Limited (ACSAL) stood at ₹60.70, reflecting a 2.72% decline. The stock opened at ₹65.50, with a high and low of ₹65.50 and ₹60.00, respectively. The previous closing was ₹62.40, and the day saw a total traded value of 57,000 shares, providing a snapshot of recent market dynamics.

Key IPO Highlights:

• - IPO duration: October 12, 2023, to October 16, 2023
• - Listing Date: October 25, 2023
• - Face Value: ₹10 per share
• - Issue Price: ₹45 per share
• - Lot Size: 3000 Shares
• - Total Issue Size: 3,276,000 shares, aggregating up to ₹14.74 Cr
• - Fresh Issue: 3,276,000 shares, aggregating up to ₹14.74 Cr
• - Issue Type: Fixed Price Issue IPO
• - Listing At: SME, NSE

Equity Transition:

Pre-IPO, Arvind and Company Shipping Agencies had 8,861,800 shares in circulation. Post the IPO, this figure increased to 12,137,800 shares, indicating a substantial shift in market dynamics.

IPO Reservation Dynamics:

Strategically, the IPO allocated 3,276,000 shares, with 168,000 (5.13%) for Market Makers, 1,554,000 (47.44%) for Non-Institutional Investors (NIIs), and an equivalent 1,554,000 (47.44%) for Retail Individual Investors (RIIs).

IPO Timeline Snapshot:

• - IPO Open Date: Thursday, October 12, 2023
• - IPO Close Date: Monday, October 16, 2023
• - Basis of Allotment: Thursday, October 19, 2023
• - Initiation of Refunds: Friday, October 20, 2023
• - Credit of Shares to Demat: Monday, October 23, 2023
• - Listing Date: Wednesday, October 25, 2023
• - Cut-off time for UPI mandate confirmation: 5 PM on October 16, 2023

Promoter Holdings Shift:

Promoters, namely Mr. Arvind Kantilal Shah, Mr. Vinit Arvind Shah, Mrs. Parul Arvind Shah, and Mr. Chintan Arvind Shah, held 100% of shares pre-issue. Post the IPO, their stake transitioned to 73%.

Company Profile:

Incorporated in September 1987, Arvind and Company Shipping Agency, located in Jamnagar, Gujarat, is a prominent player in the carrying and forwarding agents' space. The company operates a fleet of vessels, including Cargo Barges, Flat Top Barges, Crane Mounted Barges, Hopper Barges, Spud Barges, and tugs for Cargo. Beyond marine services, the company has expanded its horizon into the hospitality business with Hotel Millennium Plaza and Hotel 999.
Arvind and Company Shipping Agency Limited has over 15 employees and has successfully completed 850+ projects.

Competitive Strengths:

• 1. Experienced Promoters and Management Team: The company boasts seasoned leadership, contributing to its strategic vision and operational efficiency.
• 2. Competitive Cost Structure and Efficient Operations: A robust cost structure positions the company competitively in the market, enhancing overall operational efficiency.
• 3. Strategic Location: The company's facilities are strategically located, fostering closer association with vendors and customers.

Financial Performance Overview:

As of March 31, 2023, Arvind and Company Shipping Agency reported compelling financials:

• - Assets: ₹3,381.18 Lakhs
• - Revenue: ₹841.10 Lakhs
• - Profit After Tax: ₹347.12 Lakhs
• - Net Worth: ₹914.05 Lakhs
• - Reserves and Surplus: ₹913.05 Lakhs
• - Total Borrowing: ₹2,232.21 Lakhs

Key Financial Indicators:

• - Market Cap: ₹54.62 Crores
• - P/E (x): 9.74
• - Post P/E (x): 8.01
• - ROE: 46.88%
• - ROCE: 37.44%
• - Debt/Equity: 2.44
• - EPS (Rs): 4.62
• - RoNW: 46.88%

Objects of the Issue:

• 1. Funding Capital Expenditure of the Company: Investing in infrastructure and operational enhancements.
• 2. General Corporate Purpose: Supporting routine business activities.
• 3. Meeting Public Issue Expenses: Covering the various costs associated with the IPO launch.

IPO Review:

suggests that the company, with barges chartering services as its primary income source, has ventured into the hospitality segment. Based on FY24 annualized earnings, the issue appears reasonably priced. In formed investors may find potential for medium to long-term rewards.

IPO Subscription Status:

As of October 16, 2023, the Arvind and Company Shipping Agencies IPO witnessed remarkable subscription, reaching an astonishing 385.03 times. The retail category subscribed 321.97 times, while Non-Institutional Investors (NIIs) subscribed 436.05 times.

Note: All financial figures are in INR (Indian Rupees), and market-related data is as of December 15, 2023.

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