'Subscribe' to Innoventive Industries IPO: Nirmal Bang

MUMBAI: Nirmal Bang has advised investors to ‘Subscribe’ to the initial public offering of Innoventive Industries with a medium to long term perspective.

“At the price band of Rs. 117-Rs.120, IIL is priced at 14.22x-14.47x of its annualized EPS of Rs. 8.30. Whereas on EV/ EBIDTA basis IIL looking attractive and is priced at 6.65x-6.73x.

Though on valuation terms, Issue is relatively expensive compare with other pipes & tubes company, but considering strong focused on high margin innovative products, coupled with capacity expansion, IIL should be looking as a multi-product engineering company and should command premium valuation compare to other pipes & tubes company.

We recommend investors to “Subscribe” to the issue with a medium to long term perspective,” the report said.

It has entered the capital market to raise around Rs 220 crores by issuing shares in the price band of Rs 117-120 per share. It plans to use the proceeds in increase capacity expansion of manufacturing facility and repayment of term loan.

Innoventive Industries is a multi-product engineering company engaged in the manufacturing and sale of precision steel tubes, tubular, auto & machined components and other steel products which find application in diverse industrial sectors such as transportation, oil & gas, power, farm equipments and general engineering.