SJS Enterprises IPO subscribed 51% on second day of bidding

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The decorative aesthetics supplier SJS Enterprises’ initial public offering (IPO) has been subscribed 51 percent on November 2, the second day of bidding.

Investors put in bids for 53.86lakh equity shares against the IPO size of 1.05 crore equity shares.

Retail investors bought 1 time of shares against the portion reserved for them.

The portion set aside for non-institutional investors subscribed 6 percent, while qualified institutional buyers were yet to be bid for.

The company raised Rs 240 crore from 18 anchor investors on October 29, allocating 44,28,043 equity shares at a price of Rs 542 apiece.

Choice broking highlights the company’s strengths as its strong manufacturing capabilities supported by an established supply chain and delivery mechanism, strong innovation and product design & development capabilities.

However, the brokerage is concerned that the company is exposed to risks due to the continued slowdown in the global auto sector, raw material cost pressures, challenges in integrating new acquisition and business seasonality.

It assigns a “Subscribe with Caution” rating for the issue.

Also Read - SJS Enterprises IPO: Brokerage houses upbeat, but suggest caution

The company is one of the leading players in the Indian decorative aesthetics industry in terms of revenue in FY20 and FY21, offering the widest range of aesthetics products in India for a wide range of customers primarily in the automotive and consumer appliance industries.

It supplies aesthetics products for several industries including two-wheeler, passenger vehicle, consumer appliance, commercial vehicles, medical devices, farm equipment and sanitary ware. Its customers are Suzuki, Mahindra & Mahindra, John Deere, Volkswagen, Ashok Leyland, Honda Motorcycle, Bajaj Auto, Royal Enfield, TVS Motor, Marelli, Visteon, Brembo, Mindarika, Whirlpool, Panasonic, Samsung, Eureka Forbes, Godrej, Liebherr, Sensa Core, and Geberit.

SJS Enterprises recorded profit of Rs 47.76 crore in the year ended FY21, increasing from Rs 412.85 crore in FY20, and revenue in the same period, increased to Rs 251.61 crore from Rs 216.17 crore. In the quarter ended June 2021, the company had a profit of Rs 9.5 crore on revenue of Rs 74.3 crore.