Shankara Building Products to make stock market debut tomorrow

NEW DELHI: Shankara Building Products, whose Rs 350 crore-initial public offering ( IPO) got subscribed by 41.88 times recently, will make debut on BSE and NSE on Wednesday.

The price for the issue, which ran during March 22 and March 24, has been set at Rs 460.

The non-institutional investor (NII) portion, which includes high net-worth individuals (HNIs) had lapped up their quota limit by 90.98 times. Qualified institutional buyers (QIBs) had bid for shares 51.62 times the quota limit. Retail investors also subscribed to 15.35 times shares reserved for the investor class.

On EV/Sales, the stock is valued at 0.6 times, while it is valued at 19 times its earnings per share (EPS) on 9MFY17 annualised basis (post dilution).

The company offers steel-based products, such as pipes and tubes, TMT bars, structural steel and allied steel products.
As on September 2016, the company was operating 100 Shankara BuildPro stores, spread across 10 states in India. Shankara Buildcon caters to a large customer base across various end-user segments in urban and semi-urban markets through its multi-channel sales approach, processing facilities, supply chain and logistics capabilities.

Payments under the leases accounted for a significant portion of its operating expenses, and Shankara expects most of the retail stores to be opened in the future will be on leasehold property.

Retail is a higher margin segment for the company, revenues from which has shot up to 42 per cent as of December 31 from 24 per cent in FY14 9MFY17, primarily due to healthy store expansion.Higher contribution from the retail segment has led to increase in blended Ebitda margins from 4.6 per cent in FY14 to 6.4 per cent in 9MFY17, it noted.