Marco Cables & Conductors IPO: Connecting to Growth
Introduction:
Marco Cables & Conductors Limited, a key player in the wires, cable wires, and conductors manufacturing industry, recently launched its IPO. This fixed-price issue was valued at Rs 18.73 crores and consisted of both a fresh issue of 26.01 lakh shares, amounting to Rs 9.36 crores, and an offer for sale of 26.01 lakh shares, totaling Rs 9.36 crores. The IPO bidding window opened on September 21, 2023, and concluded on September 25, 2023. Allotment results for the Marco Cables & Conductors IPO were made available on September 28, 2023, and the shares commenced trading on NSE SME on the same day. The IPO was priced at ₹36 per share, with a minimum lot size of 3000 shares and a minimum investment of ₹108,000 for retail investors.
Key Market Participants:
Shreni Shares Private Limited served as the book running lead manager for the Marco Cables & Conductors IPO, while Bigshare Services Pvt Ltd acted as the registrar. Shreni Shares also played a crucial role as the market maker for this IPO.
Stock Performance:
As of October 6, 2023, Marco Cables & Conductors Limited's stock was trading at ₹44.20, reflecting a 4.99% increase. The stock had opened at ₹43.75, reached a high of ₹44.20, and touched a low of ₹40.65. The previous closing price was ₹42.10, with a total traded value of 3,12,000 shares.
Ownership Structure:
Before the IPO, the company had a pre-issue shareholding of 100.00%, which reduced to 72.18% post-issue.
Financial Insights:
Marco Cables & Conductors Limited demonstrated notable growth in its financial performance. As of March 31, 2023, the company's assets amounted to ₹6,993.44 lakhs. It reported revenue from operations of ₹5,693.72 lakhs for fiscal 2023. More impressively, the company's profit after tax surged to ₹280.71 lakhs, marking substantial growth. The company's net worth stood at ₹1,560.86 lakhs, with reserves and surplus of ₹1,238.90 lakhs. Total borrowings amounted to ₹3,757.73 lakhs.
Market Indicators:
Key performance indicators included a Price-to-Earnings (P/E) ratio of 20.22, Post P/E of 24, Market Capitalization of ₹67.32 crores, Return on Equity (ROE) of 22.41%, Return on Capital Employed (ROCE) of 16.93%, Debt/Equity ratio of 2.41, Earnings per Share (EPS) of ₹1.78, and Return on Net Worth (RoNW) of 17.98%.
Objectives of the Issue:
The net proceeds from the Marco Cables & Conductors IPO were intended for various purposes, including:
- 1. Funding capital expenditure requirements for purchasing a Solar Power System and 1+12 Rigid Stranding Machine.
- 2. Funding incremental working capital requirements.
- 3. General corporate purposes.
Expert Opinion:
Highlighted that the company operates in a highly competitive and fragmented segment. While its revenues remained stable for FY22 and FY23, the company reported boosted profits for FY23. Based on this strong earnings performance, the IPO was seen as fully priced. Knowledgeable investors with a risk appetite may consider investing for the medium to long term.
Subscription Status:
The Marco Cables & Conductors IPO garnered significant interest from investors, with an overall subscription rate of 30.90 times as of September 25, 2023. Retail investors displayed strong enthusiasm with a subscription rate of 35.24 times. The issue also saw substantial interest from other investors, with a subscription rate of 24.36 times.
Conclusion:
Marco Cables & Conductors Limited's IPO offers investors an opportunity to participate in the growing wires and cable manufacturing sector. Prospective investors should conduct thorough due diligence on the company's competitive positioning, growth prospects, and financial health before making investment decisions. As always, diversification and prudent risk management are key principles to follow when investing in the stock market.
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