ideaForge IPO versus Cyient DLM IPO versus PKH Ventures IPO: Which public issue should you invest in?

A total of three initial public offerings (IPO) are open for subscription on Friday, June 30. While it is the last day today for the subscription of ideaForge Technology IPO and Cyient DLM IPO, the bidding period for PKH Ventures IPO opened today.

The ₹567-crore worth IdeaForge Technology IPO has seen massive subscription of over 54 times so far. It is the market leader in the Indian unmanned aircraft systems (UAS) market, with a market share of approximately 50% in FY2022.

Cyient DLM operates in the sunshine Electronic Manufacturing Services (EMS) sector which has a great potential in terms of sustained business performance amid the conducive environment provided by the government.

On the other hand, PKH Ventures is a construction company primarily in the business of construction and development, hospitality, and management services.

Read here: PKH Ventures IPO opens today: GMP, price, other details. Apply or not?

Investors’ questions on which IPO should they subscribe to get complicated with a slew of other SME IPOs on the deck. However, among ideaForge IPO, Cyient DLM IPO and PKH Ventures IPO, analysts believe investors should carefully consider their risk tolerance before investing in either company.

All three companies are fast-growing and have the potential to deliver significant listing gains. Most analysts are of the view that ideaForge Technologies IPO may be preferred by short term investors looking for listing gains, while investors with long-term perspectives can opt for Cyient DLM and PKH Ventures.

“With a flurry of IPOs this week including Cyient DLM, ideaForge and PKH Ventures, we believe that Cyient DLM is better positioned from a long-term perspective,” said Dhruv Mudaraddi, Research Analyst, StoxBox.

Also Read: ideaForge IPO closes today: Latest GMP to subscription status. Apply or not?

Cyient DLM enjoys several competitive advantages and capabilities which provides it a strong edge in the marketplace including their sectoral expertise, the high complexity of the products they manufacture, their ability to provide end-to-end solutions, and the trust of their customers.

“Though we expect listing gains in ideaForge, we would wait for a few quarters before committing to long term investments due to visible slowdown in the order book and high concentration of revenues from Indian defence forces. As far as PKH Ventures is concerned, the past financial performance does not instil confidence in holding the stock from a long term perspective and would like to revaluate the performance in future,” he added.

As far as valuations are concerned, on FY23 annualized financials, ideaForge Technology IPO is valued at 87.5x P/E, 61.2x EV/EBITDA and 15.5x EV/sales, at the upper price band, while Cyient DML IPO is valued at 66.2x P/E, 25.6x EV/EBITDA and 2.7x EV/ Sales, at the upper price band. 

On FY22 financials, PKH Ventures IPO is valued at 30x P/E, 24.5x EV/EBITDA and 6.5x EV/Sales, at the upper price band. 

Also Read: HMA Agro Industries IPO: What GMP (grey market premium) signals ahead of share listing day

Analysts at Reliance Securities recommend ‘Subscribe’ to all the three IPOs. The brokerage is positive on ideaForge Technology considering the healthy business prospects, indigenous design and technological capabilities, diversified product portfolio, ability to deliver customer centric offerings and huge potential for the Drone industry itself. 

On the back of Cyient DML’s strong business prospects, healthy financials, diversified product mix, tailwinds on the back of solutions-oriented approach, client-focused service and track record of reliability, it recommend Subscribe rating to the issue.

For PKH Ventures, Reliance Securities said the company is poised for growth in the coming years led by multiple projects in the pipeline. It highlighted the company’s healthy business prospects, decent financials, expertise in the Hospitality vertical, synergies led by acquisition of Amar Remedies and experienced management.

GMP

ideaForge Technology IPO GMP today or grey market premium is ₹530, while that of Cyient DLM is ₹112 and PKH Ventures is ₹11, as per market observers.

Disclaimer: The views and recommendations given in this article are those of individual analysts and brokerage firms. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

Updated: 30 Jun 2023, 12:38 PM IST