The public issue comprises sale of 50.74 lakh fresh equity shares of the company and there is no offer-for-sale (OFS) component. At the upper end of the price band, the company is expected to mop-up ₹165 crore through its IPO.
There has been no activity in the grey market today with respect to Venus Pipes shares. The company's shares are expected to list on stock exchanges BSE and NSE on Tuesday, May 24, 2022.
Proceeds from the public issue will be used for financing the project cost towards capacity expansion and backward integration for manufacturing of hollow pipes, to meet working capital requirements and for general corporate purposes.
The Gujarat-based company is stainless-steel pipes and tubes manufacturer and exporter in India with engaged in manufacturing of stainless-steel tubular products in two broad categories, seamless tubes and pipes; and welded tubes and pipes.
“Venus has moderate debt of ₹38 crore on its balance sheet, which is around 0.8x debt/equity. Moreover, Venus’ FY21 ROCE appears significantly high due to strong asset utilisation and improved profitability. Backward integration helps with better margins but the asset base increases leading to lower asset turns," said Wealthstreet in a note.
For the financial year ended on March 31, 2021, the revenue from operations stood at ₹309 crore and its net profit was at ₹23.6 crore. For nine months ended December 31, 2021, Venus Pipes' revenue from operations was at ₹276 crore and its net profit was ₹23 crore.
“Venus increased its capacity over FY19-21, which has driven a 60% revenue CAGR over the period. Return ratios have improved strongly with strong asset utilization & improved profitability. Venus Pipes is planning to double capacity to meet the rising demand, enrich the product portfolio, enhance operational efficiency through backward integration and aims to raise the required funding through the IPO route," said Antique Stock Broking.
