Venus Pipes & Tubes Ltd shares marked a tepid listing on the stock exchanges today. Venus stock began trading at Rs 337 per share on NSE, up 3.53 per cent from the upper end of the IPO price band of Rs 310-326 per share. On BSE, the shares were trading at Rs 335 apiece. The Rs 165.42 crore initial public offering (IPO) of Venus Pipes & Tubes was open for subscription between May 11-13 as the company sold its share in the price range of Rs 310-326 apiece.
The issue got a strong response as it was overall subscribed 16.31 times. The portion reserved for qualified institutional buyers was subscribed 12 times, whereas the HNI quota was subscribed 15.66 times. The retail portion was booked 19.04 times.
Through the funds raised via the IPO, Venus Pipes & Tubes will look towards capacity expansion, technological upgradation, cost optimization of operations and support the manufacturing facility and backward integration for manufacturing of hollow pipes.
Venus Pipes and Tubes is a manufacturer and exporter of stainless steel pipes and tubes in two broad categories – seamless tubes/pipes and welded tubes/pipes. Venus Pipes and Tubes has one manufacturing plant which is located at Bhuj-Bhachau highway, Gujarat) with an installed capacity of 10,800 MT per annum. The company sells products in both domestic and international markets. Venus Pipes & Tubes exports its products to 18 countries including Brazil, the UK, Israel and countries in the European Union.
Prashanth Tapse, vice president (Research), Mehta Equities Ltd., “Decent listing gain seems to be justified with increasing Multi-fold demand for its products and company aiming to doubling its capacity to cater the demand. On valuation per se the issue is fully priced-in. Investors should note that Venus Pipes falls under or below Rs 250 crore IPO and initial it will be listing under “T” group, hence Investors should consider this and trade it accordingly with medium to long term perspectives.”
Anand Rathi had said Venus Pipes and Tubes Ltd is a manufacturer of pipes and tubes with the sole focus on manufacturing of welded and seamless pipes in a single metal category i.e. stainless steel. Being present in only one metal segment since inception, the company has gained segment expertise. The Company supplies their Products across a diversified range of sectors and the demand for their product is also expected to increase with growth in downstream sector. The company is planning to double its capacity and backward integrate with the help of IPO proceeds which will help it to increase its revenue and margins.
The company is available at the upper end of the IPO price band at 21x its FY22 annualized earnings attributable to post issue equity demanding a market cap of Rs. 6,617 million. At the upper end of the IPO price band, the issue is priced at a P/BV of 10.7x based on its NAV of Rs. 30.5 as of March 31, 2021.
The promotors had offloaded 50.74 lakh shares in this issue, which comprised 16.07 percent of their stake in the company. Their stake in the company now stands at 48.2 percent from the 64.27 percent stake held by them before this issue.
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