Shares of Stove Kraft staged a strong debut on the bourses on Friday with stock listing at Rs 498, a 29 per cent premium over its issue price of Rs 385 per share on the National Stock Exchange (NSE). On the BSE, the stock listed at Rs 467, 21 per cent higher than its issue price.
At 10:17 am, Stove Kraft was trading at Rs 463, down 7 per cent from its opening level on the NSE. A combined around 5 million equity shares have changed hands on the counter so far.
The initial public offering (IPO) of Stove Kraft had received good response from investors with the issue garnering 18 times subscription. The institutional investor portion garnered 8 times subscription, the high-networth individual (HNI) portion was subscribed 33 times, while the retail quota saw 26 times subscription.
Stove Kraft is a kitchen appliances market and owns brands like Pigeon, Gilma, and Black & Decker.
The company has a revenue compound annual growth rate (CAGR) of 13 per cent over FY18-20. During the same period, the firm's EBITDA (earnings before interest, tax, depreciation and amortization) margins were in the lower range of 2-5 per cent. In the first half of FY21, the company reported improved performance with EBITDA margin of 13.7 per cent and net profit of Rs 28 crore on account of a significant reduction in operating expenses.
“The sustainability of improved profitability performance remains a critical factor. Inability to maintain and promote the brand portfolio can impact future revenue growth. Around 20 per cent of revenues are generated from traded products,” analysts at ICICI Securities had said in IPO note.
Stove Kraft has an integrated facility at Bengaluru comprising of 12 manufacturing units to manufacture pressure cookers, non-stick cookware, hard anodized cookware, mixer grinders, induction cooktops, LPG stove, glass cooktops, IR thermometer and handy vegetable chopper. Further, The company has also commenced manufacturing LED products in its Bengaluru facility.
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