SJS Enterprises makes a weak debut; falls 5% below issue price post listing

The stock listed at Rs 540, a 0.37 per cent discount over its issue price of Rs 542 per share, on the BSE

SJS Enterprises (SJS) made a listless stock market debut, with the shares getting listed at Rs 540, a 0.37 per cent discount over its issue price of Rs 542 per share on the BSE. On the National Stock Exchange (NSE), the stock opened at par of Rs 542 per share.

Post listing, the stock hit an intra-day low of Rs 515.10, 5 per cent below its issue price. On the flipside, it hit a high of Rs 550 in intra-day trade on the BSE. On the NSE, the stock hit a high of Rs 549 and a low of Rs 515.

At 10.18 am, SJS was trading at Rs 521, 4 per cent lower against its issue price on the BSE. In comparison, the S&P BSE Sensex was up 0.26 per cent at 60,843 points. A combined 2.19 million equity shares had changed hands on the NSE and BSE till the time of writing of this report.

The initial public offering (IPO) of SJS Enterprises had received a lukewarm response as the issue got subscribed less than two times or 1.59 times. The institutional portion was subscribed 1.42 times; the wealthy investor portion by 2.32 times and the retail investor portion was subscribed 1.38 times, data shows.

The objects of the offer are to carry out the offer for sale of equity shares by the Selling shareholders; and achieve the benefits of listing the equity shares on the Stock Exchanges. The company will not receive any proceeds from the offer and all such proceeds will go to the selling shareholders.

SJS is a 'design-to-delivery' player in the Indian decorative aesthetics industry serving automotive (75 per cent of sales) & consumer appliances (25 per cent of sales) sectors. The company is a leading player in the Indian decorative aesthetics industry, offering a wide range of aesthetics products in the country. It is a "design-to-delivery" aesthetics solutions provider with the ability to design, develop and manufacture a diverse product portfolio. It caters to the requirements of the two-wheeler, passenger vehicle, commercial vehicle, consumer appliance, medical devices, farm equipment and sanitary ware industries.

"Aesthetics are a growing source of product differentiation for OEMs amid wider customer preference for aesthetically pleasing, premium products. SJS is one of the industry leaders with the widest product portfolio spanning traditional as well as advanced technology offerings," ICICI Securities said in IPO note.

Decorative aesthetics are unaffected by the EV transition and would instead be poised to gain from a kit value perspective. SJS has been among the fastest growing players in aesthetics (FY14-20 CAGR at ~15 per cent), while being among the most profitable at EBITDA and PAT levels. It has a net-cash b/s with history of consistent CFO generation. Demonstrated capability of gaining wallet share via introduction of new products and locations; history of established customer relationships, the brokerage firm said.