ASK Automotive IPO Final Day: Issue booked 51.14 times, QIB portion subscribed 142 times

ASK Automotive aims to raise Rs 834 crore via IPO

ASK Automotive’s Rs 834-crore initial public offering was booked 51.14 times on November 9, the last day of the offer.

The offer received bids for 105.85 crore shares against the issue size of 2.06 crore shares. Retail investors bid 5.7 times and non-institutional investors (NII) 35.47 times the portions set aside for them. Qualified institutional buyers (QIB) picked 142.41 times their allotted quota.

Since the issue is entirely an offer-for-sale of 2.95 crore shares, the proceeds will go to the selling shareholders. The promoters of the company are Kuldip Singh Rathee and Vijay Rathee.

The price band for the issue, which opened for subscription on November 7, has been fixed at Rs 268-282 per share.

Also Read: ASK Automotive IPO: 10 things to know before subscribing to Rs 834 crore issue

Ahead of the IPO, the company raised Rs 250.20 crore from 25 anchor investors, including Morgan Stanley, Goldman Sachs, Neuberger Berman, Florida Retirement System, Integrated Core Strategies, BNP Paribas Arbitrage, Societe Generale, and Copthall Mauritius Investment.

ASK Automotive recorded a year-on-year revenue growth of 27 percent in FY23 at Rs 2,555 crore. Its profit after tax stood at Rs 123 crore, up from Rs 82.65 crore in FY22. The company’s adjusted net debt nearly doubled from Rs 158.49 crore in FY22 to Rs 315.78 crore in FY23.

Analysts suggest subscribing to the public issue in view of the company’s expansion plans, robust financial performance and reasonable valuation.

Anand Rathi analysts said ASK Automotive is a well-established manufacturer of safety systems and critical engineering solutions for some of India’s largest original equipment manufacturers. At the upper price band, the company is valued at a P/E of 41x and EV/EBITDA of 25x.

“We believe that the valuation of the company is fairly priced and recommend a “Subscribe- Long Term” rating to the IPO,” they said.

Also Read: ASK Automotive IPO: Financials, shareholding, comparison with peers in 5 charts

Analysts at SMIFS, too, are positive on Ask Automotive. They said the company is expected to be a beneficiary of the electric vehicles evolution.

It rigorously invests in R&D to address market trends by creating new products and is looking to increase revenue from exports.

“We recommend a ‘Subscribe’ to the issue as a good long-term investment given the dominant market share of the company in the 2-wheeler (both ICE & EV) space,” said analysts.

Marwadi Financial Services, too, has subscribe call, saying the IPO is available at a reasonable valuation compared to its peers.

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