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8 November 2023

Saakshi Medtech and Panels IPO: Illuminating Opportunities in Electrical Innovation

Introduction:

The Saakshi Medtech and Panels IPO, a book-built issue with a value of Rs 39.93 crores, marks an exciting development in the world of refurbished electronics. This IPO consists entirely of a fresh issue of 84.96 lakh shares. The bidding phase for this offering commenced on September 25, 2023, and concluded on September 27, 2023. Allotment results for the Saakshi Medtech and Panels IPO were confirmed on October 4, 2023, with the shares being listed on NSE SME on October 5, 2023. Priced within a range of ₹44 to ₹47 per share, the minimum lot size for an application was set at 3000 shares, requiring a minimum investment of ₹141,000 for retail investors.

Key Participants:

Hem Securities Limited acted as the book running lead manager, with Bigshare Services Pvt Ltd taking charge as the registrar. Hem Finlease served as the market maker.

Stock Performance:

As of November 9, 2023, Saakshi Medtech and Panels Limited's stock traded at ₹245.10, reflecting a marginal decrease of 0.18%. The stock opened at ₹245.55, reached a daily high of ₹256.40, and touched a low of ₹245.00. The previous closing price stood at ₹245.55, with a total traded value of 46,800 shares.

Ownership Structure:

Before the issue, the company's shareholding was at 13,000,000 shares. Post-issue, this adjusted to 17,656,000 shares.

Financial Snapshot:

Saakshi Medtech and Panels demonstrated robust financials. As of March 31, 2023, the company's assets totaled ₹9,324.22 lakhs. In fiscal 2023, it reported a revenue of ₹12,220.19 lakhs, with a net profit of ₹1,238.30 lakhs. The net worth of the company was reported at ₹4,224.07 lakhs, with reserves and surplus amounting to ₹3,964.07 lakhs. The total borrowings stood at ₹2,007.45 lakhs.

Key Metrics:

The IPO presented a Price-to-Earnings (P/E) ratio of 10.18, a Post P/E of 13.84, a Market Capitalization of ₹171.26 crores, Return on Equity (ROE) of 34.35%, Return on Capital Employed (ROCE) of 28.57%, Debt-to-Equity ratio of 0.48, Earnings per Share (EPS) of ₹9.53, and Return on Net Worth (RoNW) of 29.32%.

IPO's Purpose:

The net proceeds from the issue were allocated for the following objectives:

1. Funding capital expenditure towards civil construction work in the existing premises of factory unit II.
2. Repayment in full or in part, of certain outstanding borrowings.
3. Funding Capital Expenditure towards the installation of additional plant and machinery.
4. Funding to meet working capital requirements.
5. General Corporate Purpose.

Expert Opinion:

Saakshi Medtech and Panels is actively involved in manufacturing electrical control panels, cabinets, medical equipment, etc. The company has showcased steady growth in top-line figures over the last three fiscal years, with over 10% net margins for the last two fiscals. Based on FY23 earnings, the issue appears reasonably priced, making it an attractive opportunity for investors seeking short to long-term rewards.

Subscription Status:

The Saakshi Medtech and Panels IPO garnered significant attention from investors, with an impressive overall subscription rate of 91.65 times as of September 27, 2023. Retail investors displayed notable enthusiasm, recording a subscription rate of 75.88 times.

Conclusion:

The Saakshi Medtech and Panels IPO provides a compelling avenue for investment in the dynamic field of electrical innovation. As with any investment, thorough research and prudent risk management are advised. This IPO offers an intriguing opportunity to be part of a company driving advancements in electrical control panels and related solutions.

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