Stove Kraft IPO subscribed 18 times despite secondary market sell-off

Institutional portion garners 8x, HNI subscribed 33 times, while retail quota saw 26x subscription

Despite the selloff in the secondary market, the maiden offering of Stove Kraft managed to garner 18 times subscription. The institutional investor portion garnered 8 times subscription, the high-networth individual (HNI) portion was subscribed 33 times, while the retail quota saw 26 times subscription. Stove Kraft is a kitchen appliances market and owns brands like Pigeon, Gilma, and Black & Decker. The company’s IPO comprised of Rs 95 crore fresh fund raise and Rs 318 crore worth of secondary share sale. The price band was set at Rs 384-385 per share. At the IPO price, Stove Kraft will have market cap of Rs 1,255 crore.

“The IPO is valued at 301x FY20 and 22x FY21E annualized earnings, which look to be at par compared to Butterfly Gandhimati and 50% discount to TTK Prestige. Notably, these peers enjoy stronger balance sheet and proven earnings record compared to Stove Kraft. Hence, IPO is valued aggressively. Despite being into operation for more than two decades and setting up strong distribution network, Stove Karft has not delivered up to the marks. While sharp improvement in earnings in 1HFY21 bodes well, we are not certain about the sustainability of the same,” said an IPO note by Reliance Securities. The brokerage had a ‘neutral’ rating on the issue.