Get App
Last Updated : Dec 19, 2019 01:02 PM IST | Source:

Subscribe to Prince Pipes and Fittings: Choice Equity Broking

Choice Equity Broking has come out with its report on Prince Pipes and Fittings. The research firm has recommended to "Subscribe'' the IPO in its research report as on December 18, 2019

Around the world 2019 has been the year of blockbuster initial public offerings (IPOs). Here's a look at the best performers in India.
Around the world 2019 has been the year of blockbuster initial public offerings (IPOs). Here's a look at the best performers in India.
  • bselive
  • nselive
Todays L/H

Choice Equity Broking's IPO report on Prince Pipes and Fittings

(PPFL), a polymer pipes & fittings manufacturer, is planning to raise up to Rs. 5,000mn through an IPO, which opens on 18th Dec. and close on 20th Dec. 2019. The price band is Rs. 177 - 178 per share. •Pre-IPO placement: On 28th Nov. 2019, the company has undertaken a private placement by converting 0.6mn compulsorily convertible preference shares into 6mn equity share for a cash consideration of Rs. 1,061.8mn. Effective price per share is Rs. 178.•The issue is combination of fresh and OFS. PPFL will not receive any proceeds from OFS. From the fresh issue (including proceeds from pre-IPO placement) net proceeds, the company will utilize the funds for repaying or prepaying certain outstanding debt, finance the new expansion project and upgrade of certain equipment at the manufacturing facilities.

Valuation and Outlook

On valuation front, based on the higher price band, PPFL 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. Considering the margins and return profile, we feel that the demanded valuation is justified. With respect to the projected FY20E andFY21E earnings, it is demanding a significant discounted valuation to its peers. Thus, considering the revival in the end-user demand, wide product-mix, strong retail franchise and business contribution from the fittings, we assign a “SUBSCRIBE” rating for the issue.

For all IPO stories, click here

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.

Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
First Published on Dec 19, 2019 01:02 pm
Follow us on