There is a queue of IPOs one after the other in the stock market, from today the IPO of auto accessory company ASK Automotive has opened. Before deciding whether to invest money in this IPO or stay away from it, it is important to get complete information about the company and the IPO.
ASK Automotive IPO
This IPO is open from today, will close on 9th November. This IPO is completely an offer for sale i.e. OFS. That means whatever earnings will be earned from the issue will go to the shareholders, the company will not get anything. Company promoters Kuldeep Singh Rathi and Vijay Rathi will put 2,95,71,390 shares for sale in OFS.
Its issue price has been fixed at Rs 268-282 per share. The company wants to raise Rs 833.91 crore through this IPO. ASK Automotive has already raised Rs 250 crore from anchor investors before the IPO. The company has allotted 88.71 lakh shares to 25 funds at the upper price band of Rs 282 per share. At this price the amount raised from anchor investors is Rs 250.17 crore.
Company Business
ASK Automotive Company is an auto accessory company, that is, it makes parts for auto companies. It is one of the largest manufacturers in the country who make brake shoes and advanced braking systems for 2-wheelers in India. According to the financial year 2022, their market share in India is around 50%.
The company provides safety systems and critical engineering solutions with in-house designing, developing and manufacturing capabilities. It makes powertrain agnostic, which ranges from electric vehicles to internal combustion engine original equipment manufacturers. The company has some big clients like TVS Motor Company, Hero MotoCorp, Greaves Electric Mobility and Bajaj Auto.
Should you invest?
If we look at it on the scale of valuation, the market cap of the public issue is Rs 5,559 crore with a price-to-earnings ratio of 45.6 times at the upper price band. Reliance Securities says that ASK will grow better than the automotive industry. The company has been able to diversify its product basket, offer new solutions to existing products and enhance the content for each of its products. We recommend subscribing to the issue.
