Get ready for another mainboard Initial Public Offering (IPO) as Shreeji Shipping Global prepares to hit the market. This video provides a detailed look into the IPO, its financial health, allocation details, and what potential investors should consider.
Shreeji Shipping Global IPO: Issue Snapshot
The Shreeji Shipping Global IPO is a book-built issue, entirely a fresh issue, with a total issue size of approximately ₹411 crore. Initially mentioned as ₹400 crore, the size has been confirmed to be slightly over ₹410 crore, settling at around ₹411 crore. The IPO will open next week, starting on Monday, for subscription.
- IPO Open Date: August 19
- IPO Close Date: August 21
- Face Value: ₹10 per share
- Cut-off Price: ₹252 per share
- Listing: BSE and NSE
Important Dates for Shreeji Shipping Global IPO
Understanding the timeline is crucial for potential investors. Here’s a breakdown of the key dates for the Shreeji Shipping Global IPO:
- Anchor Investor Allocation: August 18
- IPO Opens: August 19
- Second Day for Application: August 20
- Last Day for Application: August 21
- Allotment Status: August 22
- Refunds (if not allotted): August 25
- Shares Credited to Demat Account: August 25
- Listing Date: August 26
IPO Structure and Share Allocation
The ₹411 crore issue will be distributed among different investor categories as follows:
- Qualified Institutional Buyers (QIBs): 50% of the total shares, which includes allocation for Anchor Investors.
- Retail Investors: 35% of the total shares.
- High Net Worth Individuals (HNIs): 15% of the total shares.
Due to the issue size, the response from retailers and anchor investors on the first and second days will be important to observe before making an application decision.
Application Details and Promoter Holding
For retail investors, a minimum of 58 equity shares must be selected to apply for one lot. The minimum amount required for one lot application is ₹14,616. For other categories:
- Small HNI Category: Requires approximately ₹24,624.
- Big HNI Category: Requires approximately ₹18,504.
Before the IPO, the promoters held 100% of the company’s shares. Post-IPO, the promoter holding will be approximately 90%.
Financial Performance: A Closer Look
Shreeji Shipping Global has reported its financial performance, offering insights into its health.
Assets and Net Worth Growth
The company has shown consistent growth in its assets and net worth over the past three years:
- Assets:
- 2023: ₹600 crore
- 2024: ₹610 crore
- 2025: ₹758 crore
- Net Worth:
- Initially ₹255 crore, then ₹315 crore, and currently stands at ₹343 crore.
Revenue Trends
While assets have grown, the company’s revenue has shown a decline year-on-year:
- Revenue:
- 2023: ₹827 crore
- 2024: ₹736 crore
- 2025: ₹610 crore
Profitability (PAT and EBITDA)
Despite the fall in revenue, the company has managed to consistently grow its profit after tax (PAT) and EBITDA:
- Profit After Tax (PAT):
- 2023: ₹118 crore
- 2024: ₹125 crore
- 2025: ₹141 crore
- EBITDA:
- Increased from ₹189 crore, then to ₹198 crore, and currently around ₹200 crore.
Reserves and Borrowings
The company’s reserve and surplus also saw a fluctuation, while borrowings increased significantly in the latest year:
- Reserves & Surplus: Initially ₹255 crore, then ₹315 crore, and currently ₹196 crore.
- Borrowings:
- 2023: ₹175 crore
- 2024: ₹158 crore
- 2025: ₹256 crore
The increase in borrowings indicates a higher debt-to-equity ratio, which is considered a red flag and a concern for the company’s financial health.
Valuation Metrics
The company’s fundamental metrics provide further insight:
- Return on Equity (ROE): 43%
- Return on Capital Employed (ROCE): 28%
- Debt-to-Equity Ratio: 0.75
- Return on Net Worth: 42.91%
- Profit After Tax Margin: 23.24%
- EBITDA Margin: 33%
- Price-to-Book Value (P/B): 11
- Pre-IPO Price-to-Earnings (P/E) at Cut-off: 26
- Post-IPO Price-to-Earnings (P/E): 29
Notably, there are no listed peer competitors in this sector, making Shreeji Shipping Global a unique company that will list on both BSE and NSE. This uniqueness could offer a significant advantage.
IPO Objectives: How Funds Will Be Used
The company plans to utilize the funds raised from the fresh issue primarily for the following:
- Acquisition: Approximately ₹251 crore will be used for certain acquisitions.
- Debt Repayment/Prepayment: Only ₹23 crore will be allocated for the repayment or prepayment of existing debt.
The current utilization plan suggests that while acquisitions are targeted for long-term benefits, the company could have prioritized reducing its substantial debt.
Grey Market Premium (GMP) Update
As of August 15, the Grey Market Premium (GMP) for Shreeji Shipping Global IPO is ₹29.
- Expected Listing Price: ₹281 (Cut-off Price of ₹252 + GMP of ₹29)
- Expected Listing Gain: Approximately 12%
- Estimated Listing Gain per Lot: Approximately ₹1,682
Should You Consider Applying?
Based on the available information, the company’s valuation appears good, but its balance sheet does not seem as strong, primarily due to rising debt and declining revenue. While profit after tax has grown, the overall financial health presents a mixed picture. The company currently appears “okay-okay,” and further analysis on its growth potential is needed for a comprehensive outlook. Investors should await strong responses from anchor investors and observe the subscription trends on the initial days before making an informed decision.
