StoveKraft IPO Review 2021: A vaccine on the rollout and the financial market at an all-time high, it seems that the companies are making up for all the lost time from 2020 for IPO’s. Stove Kraft IPO will be the fourth public issue of 2021. This follows the recently concluded IRFC IPO and Indigo Paints IPO and ongoing HFFC IPO.
In this article, we cover the Stovecraft IPO Review and look into important IPO information and find out the possible prospects of the company.
StoveKraft IPO: About the Company
Stove Kraft is an emerging global home solutions brand and is already one of the largest Kitchen appliance suppliers in India. Founded in 1999, today, the company is engaged in the manufacture and retail of over 660 kitchen solutions cookware, cooking appliances, household utilities, and others.
One would come across these products under the brand name “Pigeon” and “Gilima” in the market. The two brands have been around for 13 years and enjoy a high market recall. In 2019, the company also started manufacturing Pigeon LED products. The company is also planning to cover premium and semi-premium kitchen solutions under the brand “Black + Decker”.
Stove Kraft also has a strong distribution network of 651 distributors in 27 states and 5 union territories and 12 distributors for exports and under the “Gilima” brand, it has 65 stores across 4 states and 28 cities in India. The company also has a global presence through countries like the USA, Mexico, Kenya, Qatar, Sri Lanka, Fiji, Bahrain, Kuwait, etc.
The company has well-equipped manufacturing facilities in Bengaluru (Karnataka) and Baddi (Himachal Pradesh). The Bengaluru facility focuses on the manufacture of Pigeon and Gilima branded appliances. The Baddi facility on the other hand focuses on the Oil Company Business (OCB) to manufacture products like LPG stoves, inner lid cooker, etc.
The company has a very strong brand name in the Indian markets. The brand Pigeon was listed as one of “India’s Most Admired Brands 2016 by the White Page International. The company also has had a co-branding initiative for over 7 years with LPG companies such as Indian Oil Corporation Ltd and Hindustan Petroleum Corporation Ltd to utilize their sale and distribution channels.
Key StoveKraft IPO Information
The promoters of the company are Rajendra Gandhi and Sunita Rajendra Gandhi. They together hold 61.31% of the pre-offer paid-up equity capital. The company also has 14.92 lakh shares held by Sequoia Capital India Growth Investment Holdings I, and 60.07 lakh shares held by SCI Growth Investments II.
| Particular | March 2018 | March 2019 | March 2020 | Sept 2020 (6 Months) |
|---|---|---|---|---|
| Revenue | 5,289.52 | 6,409.38 | 6,698.61 | 3,288.36 |
| Profit/(Loss) | -120 | 7.33 | 31.6 | 287.73 |
| Diluted EPS | -4.95 | 0.27 | 1.05 | 9.57 |
(Note: Source: RHP)
Stove Kraft filed for an IPO with SEBI in February last year. The company has appointed Edelweiss Financial Services and JM Financial as the book running lead managers to the offer. KFin Technologies Private Ltd will be the registrar for the IPO.
Following are the important details on the IRFC IPO
| Particular | Details |
|---|---|
| IPO Size | ₹412.63 Cr |
| Fresh Issue | ₹95.00 Cr |
| Offer For Sale(OFS) | 8,250,000 Eq Shares of ₹10 |
| Opening Date | Jan 25, 2021 |
| Closing Date | Jan 28, 2021 |
| Face Value | ₹10 per equity share |
| Price Band | ₹384 to ₹385 per equity share |
| Lot Size | 38 Shares |
| Minimum Lot Size | 1 i.e. ₹14,630 |
| Maximum Lot Size | 13 i.e. ₹190,190 |
| Listing Date | Feb 5, 2021 |
StoveKraft IPO – Purpose of the IPO
The net IPO proceeds are proposed to be utilized for the following objectives:
- To make the repayment or prepayment payment of the company’s borrowings fully or partially
- To meet general corporate purposes.
Stove Kraft IPO – Grey market information: The shares of Stove Kraft were reported to be carrying a grey market premium of Rs 101 i.e. 26% over the IPO price.
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Closing Thoughts
Stove Kraft despite being one of the largest Kitchen appliance suppliers but still has a few concerns. The brand Pigeon which contributes 80% of its sales is under dispute. The company broke even only two years ago and has been profitable for only 2 years.
Despite posting exceptional profits in the coming years especially in the first half of final year 21 these concerns are to be noted before investing in the IPO. Happy Investing!
Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
