Stallion India Fluorochemicals IPO Day 2: Latest GMP, subscription status to review. Apply or not?

Stallion India Fluorochemicals IPO Day 2: Stallion India Fluorochemicals Ltd, which specializes in the distribution of industrial gases and refrigerants, initiated its Initial Public Offering on Thursday, January 16. The company plans to raise ₹199.45 crore, with its shares set to be traded on both the BSE and NSE platforms. On January 15, just a day before the IPO opened, the company raised ₹59.83 crore from six institutional investors via its anchor book.

Stallion India Fluorochemicals IPO lot size is 165 equity shares, and additional purchases must also be in multiples of 165 equity shares. The Stallion India IPO has allocated 50% of the shares in the public offering for qualified institutional buyers (QIB), a 15% for non-institutional investors (NII), and 35% of the offer is set aside for retail investors.

Stallion India Fluorochemicals focuses on the distribution of refrigerants and industrial gases, along with related products. The company primarily engages in debulking, blending, and processing refrigerants and industrial gases, as well as marketing pre-filled cans. It serves a diverse range of industries, including air conditioning and refrigeration, firefighting, semiconductor manufacturing, automotive production, pharmaceuticals and healthcare, glass bottle production, aerosol manufacturing, and spray foam applications.

The company has four operational facilities. According to the red herring prospectus (RHP), the company's listed competitors include Navin Flourine International Ltd (with a P/E of 70.82), SRF Ltd (with a P/E of 49.30), and Gujarat Fluorochemicals Ltd (with a P/E of 108.36).

Stallion India Fluorochemicals IPO Subscription Status

The initial public offer of Stallion India IPO has been subscribed 32.06x on the second day of subscription, at 17:00 IST, as per BSE data.

The initial share sale received bid for 49,73,74,020 shares against 1,55,12,978 shares on offer, according to BSE.

The portion for retail investors received 30.93 times subscription while the quota for non-institutional investors got subscribed 77.04 times. The qualified institutional buyers (QIBs) part is booked 31%.

On the first bidding day, Stallion India Fluorochemicals IPO subscription status was 7.08x, as per BSE data.

Stallion India Fluorochemicals IPO Review

Stoxbox

As per Prathamesh P Masdekar, Research Analyst at Stoxbox, the company has focused on expanding its operations to various domestic locations to capture market demand in different industry hubs. They are also dedicated to increasing product accessibility in order to widen their customer base and boost revenue. This strategy facilitates better use of processing facilities and enhances cash flow.

Moreover, the company has noticeably shifted towards expanding its product range to include high-margin offerings. With its strategic plan in place, management is optimistic about improving profitability. Considering its recent financial results, the valuation seems fair at a P/E ratio of 35.4x at the upper price band based on FY24 earnings. Consequently, Prathamesh has advised a SUBSCRIBE rating for the issue.

Bajaj Broking

Specializing in various refrigerant and industrial gases, the company has established a strong market position by offering high-quality, cost-effective products. Its strategic shift towards high-margin products is expected to enhance profitability. The management remains optimistic about future earnings growth. Considering its financial track record, the issue seems reasonably priced, making it suitable for medium to long-term investment.

Stallion India Fluorochemicals IPO Details

Stallion India IPO, which is worth ₹199.45 crore, comprises a fresh issue of ₹160.73 crore, and an offer-for-sale (OFS) of 43,02,656 equity shares by the promoter.

The company intends to utilize the net funds raised from the IPO to meet additional working capital requirements, finance capital expenditures for its semiconductor and specialty gas debulking and blending facility situated in Khalapur, Maharashtra, support capital expenditures for its refrigerant debulking and blending facility in Mambattu, Andhra Pradesh, and for various corporate activities. Anchor bidding is scheduled to begin on January 15, 2025, and the issuance is expected to wrap up on January 20, 2025.

The funding generated from the IPO will facilitate capital investments at our plants in Khalapur, Maharashtra, and Mambattu, Andhra Pradesh, focusing on semiconductor and specialty gas debulking and blending, as well as refrigerant debulking and blending facilities, while also addressing increased working capital needs. "These investments will enable us to embark on a new phase of growth and expansion," stated Shazad Sheriar Rustomji, Chairman & Managing Director.

Sarthi Capital Advisors Private Ltd serves as the book running lead manager for the issuance, and Bigshare Services Private Ltd is appointed as the Registrar for the issuance.

Stallion India IPO GMP today

Stallion India Fluorochemicals IPO GMP today or grey market premium is +38. This indicates Stallion India share price were trading at a premium of ₹38 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Stallion India share price was indicated at ₹128 apiece, which is 42.22% higher than the IPO price of ₹90.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

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