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Last Updated : Dec 19, 2019 05:28 PM IST | Source: Moneycontrol.com

Prince Pipes IPO Day 2: Subscription at 74%, retail fully booked

Choice Broking feels on valuation front, based on the higher price band, Prince Pipes is demanding a P/E multiple of 23.5x (to its restated FY19 EPS of Rs 7.6), which is at a marginal discount to peer average of 25.7x.

The public offer of Prince Pipes and Fittings has been subscribed 74 percent so far on second day of bidding, December 19.

The issue continued to get support from retail investors, whose reserved portion has subscribed 1.05 times so far.

The IPO has received bids for 1.45 crore equity shares against offer size of over 1.97 crore equity shares, the exchanges data showed.

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The portion set aside for qualified institutional buyers has seen subscription of 68 percent and that of non-institutional investors 5 percent.

Prince Pipes IPO opens on December 18; 10 things to know

The Mumbai-based polymer pipes and fittings manufacturer launched its Rs 500 crore IPO for subscription on December 18, with a price band of Rs 177-178 per share.

The issue consists of fresh issue of Rs 250 crore and an offer for sale of Rs 250 crore by promoters.

Prince Pipes has six manufacturing facilities, which gives it a strong presence in north, west and south India. It markets products under two brand names: Prince Piping Systems and Trubore.

Should you subscriber or avoid?

"At the upper price band, the offer is at a P/E of 23.4X FY19 EPS. Though the company boast of a healthy return ratio return on equity (RoE) being 20.80 percent, and operating margin at 11.83 percent.; the concern being declining operating margin, low single digit PAT margin and high sensitivity to raw materials prices. The issue looks fairly priced. However, the possibility of a 15-20 percent listing gain cannot be ruled out," said IndiaNivesh.

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First Published on Dec 19, 2019 12:42 pm
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