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Avoid to Exxaro Tiles: Choice Equity Broking

Choice Equity Broking has come out with its report on Exxaro Tiles. The research firm has recommended to ''Avoid'' the ipo in its research report as on August 03, 2021.

August 03, 2021 / 11:51 PM IST
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Choice Equity Broking IPO report on Exxaro Tiles

Exxaro Tiles Ltd. (ETL), is coming up with an IPO to raise up to Rs. 161cr, which opens on 4th Aug. and closes on 6th Aug. 2021. The price band is Rs. 118 - 120 per share. • The issue is a combination of fresh and OFS. The company will not receive any proceeds from the OFS portion. Of the net proceeds from the fresh issue, Rs. 50cr will be utilized to prepay/repay certain borrowings and another Rs. 45cr will be used to fund the working capital requirement of the company.

Valuation and Outlook

At higher price band of Rs. 120, the company is demanding a P/E valuation of 35.3x (to its restated FY21 EPS of Rs. 3.4). Considering the RoE of 5.6%, the demanded valuation seems to be highly stretched. There are already much better established peers in the listed space, which an investors can consider for investment. This we are assigning an “AVOID” rating for the issue.

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Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

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