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Venus Pipes IPO fully subscribed, retail segment overbooked on day 1. GMP, key points

Photo: iStockphoto

As of 3:45 pm on day 1, Venus Pipes IPO has been oversubscribed 2.01x with retail category overbooked 3.53 times, NIIs bid 0.64 times, QIBs 0.36x, BSE data showed.

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 165.41 crore. 

As per market observers, Venus Pipes shares are available at a premium (GMP) of 40 in the grey market today. The company's shares are expected to list on stock exchanges BSE and NSE on Tuesday, May 24, 2022.

"The Company has delivered good growth in Sales over past few years along with increasing margin profile. However, Venus faces competition from its peers who hold substantial market share in the SS pipes and tubes market. When compared to its listed peers, Venus seems to be richly priced. We recommend an "Avoid" rating to this IPO," said brokerage Anand Rathi in a note.

Proceeds from the 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 a growing stainless-steel pipes and tubes manufacturer and exporter in India having about six years of experience in manufacturing of stainless-steel tubular products in two broad categories, seamless tubespipes; and welded tubes or pipes.

“Being the exporter of Steel Pipes & Tubes across the country, Venus IPO generated good revenue growth in the past and its margins are improving YoY. Keeping these factors in mind, investors could subscribe to this IPO for a medium to a long term perspective. Since markets are tilting towards the bearish mode, the investor may or may not get listing gains," said Shruti Khandare, CMO, MyFundBazaar India.

The company, under the brand name Venus, supplies its products for applications in diverse sectors including chemicals, engineering, fertilizers, pharmaceuticals, power, food processing, paper and oil and gas.