Introduction:
2023 was a record-breaking year for Indian IPO investors, with as many as 230 companies launching their Initial Public Offerings (IPOs) in the market. Out of them, only 57 companies are mainboard, while the rest are Small and Medium-sized Enterprises (SMEs). As we approach the year-end, one more SME IPO has hit the D-street – Supreme Power Equipment IPO.
Engaged in the manufacturing and refurbishing of different types of transformers, Supreme Power Equipment Limited plans to raise up to Rs. 46.67 crores through its IPO. The IPO is a completely fresh issue of 71.8 lakh shares and has opened for public subscription on Thursday, 21 December 2023.
Continue reading to learn more about the Supreme Power Equipment IPO, including the latest grey market premium (GMP), subscription status, price band, lot size, etc.
About Supreme Power Equipment Limited
Incorporated in 1994, Supreme Power Equipment Limited is presently engaged in manufacturing, upgrading, and refurbishing different types of transformers. These include power transformers, solar transformers, isolation transformers, energy-efficient transformers, converter transformers, and rectifier transformers.
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The company's transformers are utilised across different sectors to ensure effective transmission and distribution of electrical energy. The company has received ISO 9001:2015 and ISO 14001:2015 certifications for product quality. It has a manufacturing facility in Thirumazhisai, Chennai spread across a land area of 17,876 square metres.
Key Strengths of the Company
Analysing a company’s key strengths can provide insights into its future growth potential and help you make an informed IPO investment decision. Below are the primary strengths of Supreme Power Equipment Limited as highlighted in the company’s Red Herring Prospectus (RHP):
- The company is known for manufacturing highly engineered products
- It boasts a highly qualified, experienced, and well-trained workforce
- The company’s marketing team has an excellent track record under its belt
- The company offers a wide range of products, including power transformers, solar transformers, isolation transformers, energy-efficient transformers, converter transformers, and rectifier transformers
- The company’s manufacturing facility is equipped with state-of-the-art infrastructure and technology
- The company’s client list includes some marquee names in the industry. Additionally, it enjoys long-standing relationships with its customers
Key Risks or Weaknesses Highlighted
Evaluating a company’s weaknesses can give you an idea of the threats that could impede its sustained growth. Below are the key risks or weaknesses associated with Supreme Power Equipment Limited:
- The company is engaged in a capital-intensive business. It requires significant funding for investment in equipment, technology, infrastructure, and workforce
- There are specific outgoing legal proceedings against the company. Unfavourable results may harm the company’s reputation
- The absence of long-term agreements with raw material suppliers can disrupt the manufacturing and supply chain system
- The company operates in a highly competitive market
- It derives a major portion of the revenue from Tamil Nadu. Unfavourable circumstances in this state may lead to a huge loss of revenue
Core Financials of the Company
Not much data is available regarding the company’s financials. As of 31 July 2023, Supreme Power Equipment Limited’s net worth stood at Rs. 23 crores. The revenue from operations for the Financial Year ended 31 March 2023 stood at Rs. 100 crores while the net profit stood at Rs. 11 crores. The company has provided a highly impressive return on net worth of 60%.
Refer to the table below for detailed financials of the company for the last financial year:
*Amount in Crores
Source – RHP dates 14 December on the SEBI website
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Details of the IPO
Supreme Power Equipment IPO attracted strong bidding from investors. As of 22 December 2023, the issue was subscribed 37.92 times in the retail category and 22.40 times overall. The IPO closes for subscription on Tuesday, 26 December 2023, and the shares will list on the stock exchanges on 29 December 2023. Refer to the table below for more IPO details:
The final word
As of 22 December 2023, the GMP for Supreme Power Equipment IPO was Rs. 50, indicating a listing gain of around 77%. Considering the healthy GMP and robust financials, you can subscribe to the public issue. But before making the final investment decision, you must consider your risk appetite, investment goals, and the existing market conditions.
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