June 14, 2021

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Stovekraft IPO : Should you subscribe?

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Stovekraft IPO - Should you subscribe?

Stovekraft is an Indian company, headquartered in Bengaluru. that manufactures cooking appliances under Pigeon and Gilma brands. The company was founded in 1999 and has grown in leaps and bounds. Stovekraft has come out with its IPO and the IPO will close on January 28th. Among its cooking appliances range are mixer grinders, pressure cookers, cooktops, toasters, chimneys and kitchen utensils.

Stovekraft IPO details

The Stovekraft IPO is the fourth IPO in 2021 after IRFC, Indigo Paints, and Home First Finance Company. The IPO consists of fresh issue of ₹95 crores and an Offer For Sale (OFS) of ₹82.5 lakhs for promoters and investors. The price band has been fixed at ₹384-385. Each lot consists of 38 equity shares. The value of one lot at the upper range of the price band would be ₹14,630. A retail investor can apply for a maximum of 13 lots at a total value of ₹190,190.

The purpose of the IPO is for the repayment of certain borrowings amounting to ₹76 crores and general corporate purposes.

Stovekraft Financials

As can be seen from the image below, the revenue of Stovekraft has grown over the years.

Stove Kraft increased its profitability significantly to ₹28.8 crore in first half of FY21, from ₹4.4 crore in the corresponding period. In the financial year 2019-20, profit rose to ₹3.2 crore from ₹0.7 crore in previous year. The operating revenues climbed to ₹328.9 crore in first half of FY21, from ₹315.5 crore in same period last year. The operating revenues in FY20 rose to ₹669.9 crore from ₹640.9 crore in FY19. Stovekraft has peers such as TTK Prestige (NSE: TTKPRESTIG ₹5,908), Hawkins Cookers (BSE: HAWKINCOOK ₹5,606) and Butterfly Gandimathi Appliances (NSE: BUTTERFLY ₹504).

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Verdict on Stovekraft IPO

Several brokerage houses and experts have issued a “NEUTRAL” rating for the IPO, and have advised only investors with a high risk appetite to subscribe for it. The brand name “Pigeon” is under litigation currently and also the company sources its raw materials from third party vendors. This does not give it too much control on its prices and margins.

You can apply for the IPO here

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