SME IPO_Sonu Infratech Limited – Know all details here
We have often heard “SME IPOs comes with greater risks and greater opportunities”. What does this really mean?
It means that small or micro companies with few lacs or maximum crore of profit come up with an IPO with an objective to raise funds in exchange of equity for day-to-day operations or meeting expenses related to working capital. SME itself stands for Small and Medium Enterprises.
Sonu Infratech is one such company whose IPO opened for subscription to public on 29th April, 2022 and closes on 5th May, 2022.
Let’s look at few points before making a decision to invest.
About the company:
Sonu Infratech belongs to real estate industry and is involved in providing civil construction services.
Some of their major business segments are:
▪︎ Civil construction services
▪︎ Building construction
▪︎ Mechanical Scaffolding
▪︎ Repairs and Maintenance
They also offer services like road transportation, land levelling, piling, and excavation.
The company operates on a contract based model and is classifies as class ‘C’ contract that allows them to bid on any type of military segment work in India.
Overall the company is established brand and has good reputation in market.
About the IPO:
◇ Sonu Infratech is an BSE SME IPO.
◇ IPO opened for subscription to public on 29th April, 2022 and closes on 5th May, 2022.
◇ The lot size consists of 3000 shares.
◇ IPO price band is fixed at ₹36 per Equity share.
◇ Minimum investment required is 1,08,000 which is also the maximum one can invest.
◇ The company raises ₹8.64 crores via an IPO.
◇ IPO’s listing date is 17th May, 2022.
◇ Company Promoters are Mr. Ramji Shrinarayan Pandey and Mr. Ketan Vallabhdas Modi.
◇ Promoters diluted 30% of their stake to raise investment from public.
◇ IPO is to be listed on BSE.
◇ IPO allotment date is 10th May, 22.
◇ As of May 2nd, the IPO was subscribed 2.13 times.
◇ The issue is solely lead managed by Swastika Investmart Ltd. and Skyline Financial Services Pvt. Ltd. is the registrar to the issue.
Financials:
Since the company is not very large, it is comparatively easy to value this company and obtain earnings per share and net asset value.
Following tables give required details and it is also observed that Profits after Tax of company in 2019 was just 64 lacs which shows that this is an SME.
Pros:
◇ Real estate industry is going to see boom in next decade as per many sources which provides with possibilities that companies operating in this industry may see a boom too.
◇ The initial public offer (IPO) of Sonu Infratech Limited offers an early investment opportunity in Sonu Infratech Limited.
Cons:
◇ As the company is in early stage of growth, the investment may not yield expected returns.
◇ In other words, micro or small companies IPOs come with higher risks.
From educational purposes point of view, this stock is very important. For investors, this is worth consideration bit do your own research before making a decision.
Happy Learning and Investing!!
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