Investing in the stock market, especially in IPOs (Initial Public Offerings), can be a thrilling opportunity. One such IPO that has caught the attention of investors is from Shree Tirupati Balajee Agro Trading Company Limited.
The company operates in the agricultural sector, focusing on trading and distributing a wide range of agricultural products. From sourcing high-quality grains, pulses, and other commodities to ensuring their timely delivery to markets, Shree Tirupati Balajee Agro Trading plays a crucial role in supporting India’s agricultural supply chain.
The company has established a reputation for reliability and efficiency in the agro-trading industry, making it a trusted partner for farmers, distributors, and consumers alike. By leveraging its extensive network and industry expertise, Shree Tirupati Balajee Agro Trading aims to contribute to the growth and sustainability of the agricultural sector in India.
Now, with its IPO, the company is opening its doors to public investors, offering them a chance to be part of its growth story.
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IPO details
The Shree Tirupati Balajee Agro Trading IPO has been generating significant interest among investors. Here are the essential details:
- Price band: ₹78 to ₹83 per equity share (face value of ₹10).
- Subscription dates: Opens on Thursday, September 5, and closes on Monday, September 9.
- Anchor investors allocation: Scheduled for Wednesday, September 4.
Understanding the price band is crucial. The floor price is set at 7.8 times the face value of the equity shares, while the cap price is 8.3 times. Compared to the average industry peer group PE ratio of 30.74 times, the upper end of the price band (8.3 times) is relatively low, making this IPO an attractive option for investors looking for value.
IPO lot size and allocation
When it comes to investing in an IPO, knowing the lot size and allocation is key:
- Lot size: 180 equity shares per lot and in multiples of 180 shares thereafter.
- Allocation: The IPO has reserved not more than 50% of the shares for Qualified Institutional Buyers (QIB), not less than 15% for Non-Institutional Investors (NII), and not less than 35% for retail investors.
This allocation strategy ensures a balanced distribution of shares among different types of investors, making it accessible to both institutional and retail participants.
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A closer look at Shree Tirupati Balajee Agro Trading Company Limited
Before diving into the investment, it’s important to understand the company behind the IPO. Shree Tirupati Balajee Agro Trading Company Limited is a company that has been making waves in the agro-trading sector. The company’s operations focus on trading and distributing agricultural products, making it a crucial player in India’s agricultural supply chain.
Financial performance: Shree Tirupati Balajee FIBC Ltd
To make informed investment decisions, it’s vital to look at the financial health of the company. Shree Tirupati Balajee FIBC Ltd, another entity under the same group, provides a clear picture of the overall performance. Here’s a snapshot of the key financials from their latest director’s report for the year ended March 31, 2023:
- Revenue from operations (Net): ₹17,624.94 lakhs (2023) compared to ₹19,776.37 lakhs (2022).
- Total income: ₹17,629.07 lakhs (2023) versus ₹19,782.49 lakhs (2022).
- Total expenses: ₹16,495.94 lakhs (2023) against ₹18,910.82 lakhs (2022).
- Profit before tax (PBT): ₹1,132.52 lakhs (2023), a growth from ₹869.24 lakhs (2022).
- Profit after tax (PAT): ₹937.46 lakhs (2023) compared to ₹700.17 lakhs (2022).
- Earnings per share (EPS): ₹9.25 (2023), up from ₹6.91 (2022).
These numbers show that while there has been a slight decline in revenue and total income, the company has managed to increase its profit before and after tax, indicating improved operational efficiency.
Annual Results (Amount in Cr):
| Annual | Mar 2024 | Mar 2022 | Mar 2021 |
| Sales | 161 | 197 | 117 |
| Other Income | 2 | 0 | 0 |
| Total Income | 163 | 197 | 117 |
| Total Expenditure | 140 | 186 | 108 |
| EBIT | 22 | 11 | 8 |
| Interest | 5 | 2 | 2 |
| Tax | 3 | 1 | 1 |
| Net Profit | 14 | 7 | 4 |
What makes Shree Tirupati Balajee IPO attractive?
Several factors make the Shree Tirupati Balajee Agro Trading IPO an attractive proposition for investors:
- Competitive pricing: The upper end of the price band is set at ₹83, which is relatively low compared to the industry average PE ratio. This could provide significant upside potential if the company continues to perform well.
- Strong financials: Despite a slight dip in revenue, the company’s profitability has improved, as seen in the financials of Shree Tirupati Balajee FIBC Ltd. A PAT of ₹937.46 lakhs for the year ended March 31, 2023, indicates robust financial health.
- Balanced allocation: With 50% of the IPO reserved for QIBs and 35% for retail investors, there is a balanced distribution of shares, ensuring both institutional and individual investors have access to the IPO.
How to approach the Shree Tirupati Balajee Agro Trading IPO
If you’re considering investing in this IPO, here are a few tips to keep in mind:
Understand your risk tolerance
Investing in IPOs can be risky, as they often involve companies that are new to the public market. Make sure to assess your risk tolerance before diving in.
Do your research
While this article provides a comprehensive overview of the IPO, it’s always a good idea to conduct further research. Look into the company’s business model, growth prospects, and industry trends before making a decision.
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Consider your investment horizon
IPOs can be volatile in the short term, so it’s essential to consider your investment horizon. If you’re a long-term investor, you may benefit from holding onto your shares even if there is short-term volatility.
Evaluate the market sentiment
Market sentiment plays a significant role in the success of an IPO. Keep an eye on the broader market trends and investor sentiment as the subscription date approaches.
Conclusion
The Shree Tirupati Balajee Agro Trading IPO presents an exciting opportunity for investors looking to tap into the agro-trading sector. With a competitive price band, strong financials, and balanced allocation, this IPO has the potential to offer significant returns.
However, as with any investment, it’s crucial to do your due diligence and assess your risk tolerance before making a decision.
Whether you’re a seasoned investor or a newcomer, understanding the key details of this IPO will help you make an informed decision. Happy investing!
