Global Surface Ltd's initial public offering will open on March 13 for subscription and close on March 15. The price band for the IPO has been set at Rs 133-140 a share, and anchor bids will start from March 10.
The allotment will be done on March 20 and the stock will be listed on exchanges on March 23. Unistone Capital Pvt Ltd is the sole lead book running manager to the issue.
Global Surface plans to raise funds via issuing fresh shares of 8.52 million and an offer for sale (OFS) of upto 2.55 million shares by its existing shareholders and promoters.
Promoter Mayank Shah will sell upto 1.4 million shares while Sweta Shah will sell 1.15 million shares in the OFS. On the upper size of the price band, the firm plans to raise around Rs 154.98 crore.
The proceeds from the fresh issue of upto Rs 90 crore will be used to invest in its arm Global Surface FZE for the purpose of setting up of manufacturing facility in Dubai. The total estimated cost for setting up the plant is at Rs 150.74 crore. Post completion of their proposed expansion plans, the new unit is expected to have an estimated installed capacity of 622,896 Sq. M/ annum and is expected to be operational from FY 2023-24 onwards.
Global Surface specializes in the processing of natural stones and the production of engineered quartz. These natural stones are the result of intricate geological processes and encompass a variety of products, including but not limited to granite, limestone, marble, slate, quartzite, onyx, sandstone, travertine, and other materials that are excavated from the earth.
The company's financial performance was disappointing as it reported a decline in margins. In the fiscal year 2022, the company's revenue was Rs 190.31 crore, compared to Rs 175.37 crore in the previous year. The net profit for the period was Rs 35.63 crore, up from Rs 33.93 crore in the previous year. However, the EBITDA margin dropped to 21.97 percent from 27.05 percent in the previous year.
As of September 2022, the company's net debt stood at Rs 50.68 crore versus Rs 37.29 crore as of March 2022. According to Manan Doshi, co-founder, unlistedarena.com, the asking P/E at the upper band of the issue price, based on FY22 metrics, is around 16x after accounting for the fresh issue.
"If we annualize FY23 earnings and consider post-IPO fully diluted paid-up equity capital, the asking price is at a P/E of around 21.84 considering the expected listing price of Rs.175 and EPS of Rs.8.01. If we consider FY22 earnings, the P/E stands at 16.64 considering the expected listing price of Rs. 175 and EPS of Rs.10.52," said Manish Khanna, co-founder at Unlisted Assets.
The Grey Market Premium (GMP) of Global Surfaces is observed at Rs.35 as of March 10, as per the market sources. Considering the issue band price of Rs 133-140, the expected listing price could be Rs 175 (upper band price + GMP). The IPO may give listing gains of up to 25 percent, added Khanna.
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