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30 December 2023

Transteel Seating Technologies IPO: Crafting Excellence in Furniture

Introduction:

Transteel Seating Technologies IPO, a book-built issue of Rs 49.98 crores, signifies a blend of progress and craftsmanship. The issue encompasses a fresh issue of 67.84 lakh shares, aggregating to Rs 47.49 crores, and an offer for sale of 3.56 lakh shares, amounting to Rs 2.49 crores. The IPO bidding phase spanned from October 30, 2023, to November 1, 2023, with allotment finalized on Sunday, November 5, 2023. The stock debuted on NSE SME on November 6, 2023.

Financial Snapshot:

The IPO price band ranges from ₹67 to ₹70 per share, with a minimum lot size of 2000 shares. Retail investors need a minimum investment of ₹140,000, while HNIs have a minimum lot size investment of 2 lots (4,000 shares), totaling ₹280,000.

Market Performance Snapshot:

As of December 20, 2023, the stock was trading at ₹85.30, reflecting a -3.40% change. The opening and closing values stood at ₹88.80 and ₹84.60, respectively. The 52-week range extended from ₹84.60 to ₹91.00.

Key IPO Statistics:

- IPO duration: October 30, 2023, to November 1, 2023
- Listing Date: November 6, 2023
- Face Value: ₹10 per share
- Price Band: ₹67 to ₹70 per share
- Lot Size: 2000 Shares
- Total Issue Size: 7,140,000 shares, aggregating up to ₹49.98 Cr
- Fresh Issue: 6,784,000 shares, aggregating up to ₹47.49 Cr
- Offer for Sale: 356,000 shares of ₹10, aggregating up to ₹2.49 Cr
- Issue Type: Book Built Issue IPO
- Listing At: SME, NSE

Equity Landscape:

Pre-issue, Transteel Seating Technologies held 13,394,510 shares. Post the IPO, the figure increased to 20,178,510 shares.

IPO Reservation Strategy:

The IPO distribution allocated shares as follows: 26.05% to Anchor Investors, 10.00% to Market Makers, 18.91% to QIB, 13.53% to NII (HNI), and 31.51% to Retail Investors.

Anchor Investor Details:

The IPO raised Rs 13.02 crore from anchor investors, with a bid date of October 27, 2023. The lock-in period for 50% of shares ends on December 20, 2023, and for the remaining shares, it concludes on March 14, 2024.

IPO Timeline Highlights:

- IPO Open Date: Monday, October 30, 2023
- IPO Close Date: Wednesday, November 1, 2023
- Basis of Allotment: Sunday, November 5, 2023
- Initiation of Refunds: Sunday, November 5, 2023
- Credit of Shares to Demat: Sunday, November 5, 2023
- Listing Date: Monday, November 6, 2023
- Cut-off time for UPI mandate confirmation: 5 PM on November 1, 2023

Lot Size Landscape:

Investors could bid for a minimum of 2000 shares and in multiples thereof. The table below outlines the investment parameters for retail investors and HNIs:

Application	Lots	Shares	Amount
Retail (Min)	1	2000	₹140,000
Retail (Max)	1	2000	₹140,000
HNI (Min)	2	4000	₹280,000

Promoter Holdings Perspective:

The promoters of Transteel Seating Technologies are Mr. Shiraz Ibrahim and Ms. Nasreen Shiraz. Pre-issue, the promoter held 83.75% of shares, which decreased to 53.83% post the issue.

Company Overview:

Incorporated in February 1995, Transteel is a seasoned furniture company, boasting over 20 years of experience in the corporate and B2B sectors. Its manufacturing unit, situated in Yeshwanthpur, Bangalore, Karnataka, is a testament to its commitment to quality.
Transteel prioritizes customer satisfaction, ensuring a seamless experience from website navigation to product delivery. Notable strengths include an experienced management team, extensive sales and distribution channels across India, and a commitment to providing value-for-money, affordable furniture.

Financial Performance Snapshot:

As of September 30, 2023:

- Assets: ₹10,062.18 Lakhs
- Revenue: ₹3,133.39 Lakhs
- Profit After Tax: ₹417.64 Lakhs
- Net Worth: ₹2,860.86 Lakhs
- Reserves and Surplus: ₹1,521.41 Lakhs
- Total Borrowings: ₹3,853.15 Lakhs

Key Performance Indicators:

- P/E (x): 16.91
- Market Cap: ₹141.25 Crores
- ROE: 37.21%
- ROCE: 36.69%
- EPS (Rs): 6.8
- RoNW: 37.21%

Objects of the Issue:

The Net Fresh Issue Proceeds are designated for:
a. Prepayment/Repayment of Certain Debt Facility availed by the Company b. Purchase of Equipments to Facilitate Manufacturing c. Working Capital Requirements d. General Corporate Purposes.

Expert Analysis:

Despite being fully priced based on recent financial performance, investors are encouraged to consider long-term investment for potential rewards.

IPO Subscription Status:

As of November 1, 2023, the Transteel Seating Technologies IPO was oversubscribed 49.21 times. The retail category saw a subscription of 39.82 times, while the NII and QIB categories were oversubscribed 122.88 times and 12.15 times, respectively. The total number of applications reached 44,793, reflecting a subscription of 39.82 times.

Note: All financial figures are in INR (Indian Rupees), and market-related data is as of December 20, 2023.

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