Presstonic Engineering IPO opens on Monday, price band set at ₹72. Should you apply?

Presstonic Engineering Ltd makes infrastructure products, metro rail rolling stock products, and metro rail signalling products. It also supplies well-known domestic and international OEMs that manufacture and service rail and metro rail rolling stock and signalling equipment, as stated in the company’s Red Herring Prospectus (RHP).

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Between the financial year ending on March 31, 2023, and March 31, 2022, Presstonic Engineering Limited saw an increase in revenue of 66.11% and profit after tax (PAT) of 1721.76%, as per reports.

As stated in the RHP, the company does not have any listed peer companies for comparison of performance.

Yermal Giridhar Rao and Herga Poornachandra Kedilaya are the company’s promoters.

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Presstonic Engineering IPO details

Presstonic Engineering IPO, which is worth ₹23.30 crore, is completely a fresh issue of 3,236,800 equity share; there is no offer for sale (OFS) component, according to RHP.

The issue’s objectives are to finance capital expenditures for the purchase of more equipment and machinery, to fully repay certain loans taken out by the company, to satisfy working capital requirements, to cover issue costs, and to further general corporate purposes.

“Our Company believes that listing will enhance our Company’s corporate image, brand name and create a public market for its Equity Shares in India. It will also make future financing easier and affordable in case of expansion or diversification of the business. Further, listing attracts interest of institutional investors as well as foreign institutional investors,” said the company in its RHP. 

The Presstonic Engineering IPO’s book running lead manager is Finshore Management Services Limited, and the issue’s registrar is Cameo Corporate Services Limited. Nikunj Stock Brokers is the market maker for the Presstonic Engineering IPO.

Presstonic IPO basis of allotment of shares will be finalised on Thursday, December 14 and the company will initiate refunds on Friday, December 15, while the shares will be credited to the demat account of allottees on the same day. Presstonic Engineering IPO shares are likely to be listed on NSE SME on Monday, December 18.

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Presstonic IPO GMP today

Presstonic Engineering IPO GMP today or grey market premium is +23. This indicates Presstonic Engineering share price were trading at a premium of ₹23 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Presstonic Engineering share price was indicated at ₹95 apiece, which is 31.94% higher than the IPO price of ₹72.

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

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Presstonic Engineering IPO review

“The company is in the business of Metro Rail/Infra related products manufacturing and marketing. It posted steady growth in its top lines for the reported periods, but sudden surge in its bottom lines from FY23 onwards raised eyebrows and concern over its sustainability. Based on super FY24 annualized earnings, the issue appears fully priced. Well-informed investors may park moderate funds for the medium to long-term rewards,” said Dilip Davda, the contributing editor at Chittorgarh.

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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 09 Dec 2023, 03:39 PM IST