Electro Force (India) Limited IPO Day 3: Issue fully subscribed on strong retail, NII interest. Know GMP today

Electro Force (India) Limited IPO has opened for subscription on Tuesday, December 19, and will close on Thursday, December 21. The Electro Force (India) Limited IPO price band has been set at ₹93 apiece. The Electro Force IPO lot size is 1,200 shares. Investors can bid for a minimum of 1,200 shares and in multiples thereof.

Electro Force (India) Limited develops and manufactures metal/plastic contact parts and electrical components for the electronics, lighting, switchgear, and related industries in India.

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Using metal stamping, injection moulding, and insert moulding, Electro Force designs and produces stamping components and plastic components for electrical MCBs (Miniature Circuit Breakers), 63A electrical manual transfer switches, electrical MCCBs & RCBs, brushless DC motors for automation, aerospace, medical, and defence, electrical motor starters, electrical control gears, and electrical switches.

As stated in the Red Herring Prospectus (RHP), the company's (with a P/E of 20.22) industry peers are Centum Electronics Limited (with a P/E of 191.78), and RIR Power Electronics Limited (with a P/E of 100.74). 

Between the financial year ending on March 31, 2023, and March 31, 2022, Electro Force (India) Limited saw a decrease in revenue of -12.04% and a decrease in profit after tax (PAT) of -7.48%.

Electro Force (India) Limited IPO details

The Electro Force IPO, which is worth ₹80.68 crore, consists of a fresh issue of 6,000,000 equity shares worth ₹55.80 crore and an offer for sale (OFS) component, which includes 2,674,800 shares with a face value of ₹10, aggregating up to ₹24.88 crore, according to RHP.

The company plans to use the net proceeds from the offering to finance its pursuit of inorganic growth, general corporate purposes, and additional working capital requirements.

The registrar of the Electro Force India IPO is Skyline Financial Services Private Ltd, and the book running lead manager is First Overseas Capital Limited. Arham Shares is the market maker for the Electro Force India IPO.

“The main objects clause and objects incidental and ancillary to the main objects set out in the Memorandum of Association enable us (i) to undertake our existing business activities; and (ii) to undertake the activities proposed to be funded from the Net Proceeds. Further, our Company expects to receive the benefits of listing of the Equity Shares, including to enhance our visibility and our brand image among our existing and potential customers and creation of a public market for our Equity Shares in India,” the company said in its RHP.

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Electro Force (India) Limited IPO subscription status

Electro Force IPO subscription status is 4.13 times, so far on day 3. The issue received positive response from retail investors who's portion set was subscribed 6.15 times, and non-institutional buyers who's portion was subscribed 2.10 times, according to data on chittorgarh.com.

The company has received bids for 3,40,20,000 shares against 82,39,200 shares on offer, at 16:15 IST, according to data on chittorgarh.com.

Electro Force IPO subscription status was 93% on day 1, and was booked 2.02 times on day 2.

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Electro Force (India) Limited IPO GMP today

Electro Force (India) Limited IPO GMP today or grey market premium was ₹0, which meant shares were trading at their issue price of ₹93 with no premium or discount in the grey market according to investorgain.com.

Electro Force (India) Limited IPO GMP today was +10 in the previous session. This indicates Electro Force (India) Limited share price were trading at a premium of ₹10 in the grey market, according to investorgain.com.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

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Electro Force India Limited Review

“The company operates in a highly competitive and fragmented segment. It marked fluctuating trends in its top and bottom lines for the reported periods. Based on annualized super earnings of FY24, the issue appears fully priced. The sustainability of such margins going forward is a major concern. There is no harm in skipping this dicey IPO,” said Dilip Davda, the contributing editor at Chittorgarh.

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