Venus Pipes IPO: The initial public offering (IPO) of Venus Pipes and Tubes opened for subscription on Wednesday, May 11, 2022. The offer got fully subscribed within a few hours of the opening and by the end of the first day of bidding, it was subscribed 2.37 times.
It received total bids for 84,13,860 shares across both the stock exchanges against 35,51,914 shares on offer, data from National Stock Exchange (NSE) showed.
The Rs 165.41 crore Venus Pipes IPO will be available for subscription till Friday, May 13, 2022, and the price band of the company has been fixed at Rs 310-326 per share.
The IPO of the Gujarat-based stainless steel pipes and tubes company is entirely a fresh issue comprising a sale of 50.74 lakh (50,74,100) equity shares and there is no offer-for-sale (OFS) portion. The entire proceeds from the issue will be used for financing the project cost towards capacity expansion and backward integration for manufacturing of hollow pipes, meet working capital requirements and for general corporate purposes, according to the details given in the red herring prospectus (RHP).
Venus Pipes and Tubes is a Gujarat-based stainless steel pipes and tubes manufacturer and exporter having about six years of experience in the manufacturing of stainless steel tubular products in two broad categories – seamless tubes/pipes and welded tubes/pipes. Under the brand name Venus, it supplies its products for applications in diverse sectors including chemicals, engineering, fertilizers, pharmaceuticals, power, food processing, paper and oil and gas.
Investors who wish to subscribe to Venus Pipes IPO can bid in a lot of 46 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,996 to get a single lot of Venus Pipes and Tubes. The shares will be listed on both BSE as well as the National Stock Exchange (NSE).
The applicants also must note that the cut-off time for UPI mandate confirmation is Tuesday, May 17, 2022, upto 12:00 pm. If they fail to do so then their application may not be considered.
SMC Capitals is the book running lead manager to the offer while Kfin Technologies is the registrar of the issue.
Before heading into the IPO, Venus Pipes and Tubes on Tuesday raised over Rs 49 crore (Rs 49,62,32,636) from three anchor investors in lieu of 15,22,186 equity shares at Rs 326 each, data from the stock exchanges showed.
The anchor investors comprise of Nippon India Small Cap Fund, Kotak Mahindra Life Insurance Company and India SME Investments – Fund I.
The research team at Anand Rathi Share and Stock Brokers in its IPO note gave an “Avoid” recommendation to the offer.
Anand Rathi Research in its report noted, “The company is available at the upper end of the IPO price band at 21x its FY22 annualized earnings attributable to post issue equity demanding a market cap of Rs 6,617 million. At the upper end of the IPO price band, the issue is priced at a P/BV of 10.7x based on its NAV of Rs 30.5 as of March 31, 2021. 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.”
The share allotment is likely to take place on Thursday, May 19, 2022, and the shares are expected to be listed on Tuesday, May 24, 2022, according to the timeline given in the RHP.
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