The initial public offering (IPO) of SJS Enterprises was subscribed 1.59 times on the third and final day of its issue, according to subscription data on the stock exchanges. The IPO of the leading player in the decorative aesthetics industry opened for subscription on Monday, November 1, and closed today, November 3 – remaining open for investors for a period of three days.
On Wednesday, non-institutional individual investors showed maximum interest as the portion reserved for them was subscribed 2.32 times – the highest among the three groups of investors. The portion set aside for qualified institutional buyers or QIB was subscribed 1.42 times, while the portion reserved for retail individual investors (RII) was subscribed 1.38 times.
SJS Enterprises fixed the price band at Rs 531-542 per equity share for the public offer. The public offer received bids for 1,67,97,537 shares as against 1,05,46,140 crore shares on the offer. It was a complete offer for sale of shares worth Rs 800 crore by the existing shareholder – Evergraph and K.A. Joseph.
The company is a ‘design-to-delivery’ aesthetics solutions provider with a diverse product offering for the automotive and consumer appliance industries. Its product offerings include – decals and body graphics, 2D appliques and dials, 3D appliques and dials, 3D lux badges, domes, overlays, aluminum badges, among others.
“SJS Enterprises has reported a tepid three per cent CAGR rise in topline between FY19 and FY21 to Rs 252 crore, impacted by the pandemic during the period. The bottomline growth has also remained subdued at a CAGR of 12 per cent during the same period. However, the company has been able to maintain strong operating and profit margins during this period.
At the higher end of the price band, SJS Enterprises is priced at a PE ratio of 35 times FY21 Earnings per share. There are no listed peers to compare this valuation with. Given the supply disruptions in the auto industry, SJS Enterprises could see an impact on its financial performance. However, the management is confident that the demand will rebound in the next 3-4 months.
Given factors such as tepid growth in financials over the last three years, good return ratios, stable margins, uncertain outlook due to high dependence on auto industry, and high valuations, we remain ‘Neutral’ on the prospects of the issue,” SEBI-registered investment advisor INDmoney said.