Venus Pipes and Tubes IPO– Venus Pipes and Tubes is planning an initial public offering (IPO) on May 11, 2022. Venus Pipes is an Indian stainless steel pipe and tube producer and exporter. In the last three years and nine months, the company’s revenues have increased dramatically. For a similar time period, its margins are also improving. Should you buy in the Venus Pipes & Tubes initial public offering? What are the potential risks in this IPO? Is the IPO valuation appropriate for a 23-crore profit-making company? Allow me to conduct this IPO evaluation and provide a thorough analysis.
About Venus Pipes and Tubes IPO
Company is one of the growing stainless steel pipes and tubes manufacturer and exporter in India. It has 6 years of experience in manufacturing of stainless steel tubular products in two categories:
i) Seamless tubes/pipes and
ii) Welded tubes/pipes
Under which company is manufacturing 5 product lines, namely
(i) Stainless steel high precision & heat exchanger tubes
(ii) Stainless steel hydraulic & instrumentation tubes
(iii) Stainless steel seamless pipes
(iv) Stainless steel welded pipes
(v) Stainless steel box pipes
Under its brand name “Venus”, they supply Products for applications in diverse sectors including (i) chemicals, (ii) engineering; (iii) fertilizers; (iv) pharmaceuticals, (v) power, (vi) food processing; (vii) paper; and (viii) oil and gas.
Venus Pipes and Tubes IPO – Dates, issue details, Size and Price Band
|IPO Opening Date||11-May-22|
|IPO Closing Date||13-May-22|
|Issue Type||Book Built Issue IPO|
|Face Value||Rs 10 per equity share|
|IPO Price band||Rs 310 to Rs 326 per equity share|
|Lot Size||46 Shares|
|Listing at||BSE and NSE|
|Total Issue Size (Fresh issue)||Rs. 165.4 Crores|
What are the competitive strengths of Venus Pipes and Tubes Limited?
1) Company has international accreditations and product approvals
2) It has a specialized production of stainless steel pipes and tubes
3) Company has multi-fold demand of its products
4) Company with customer diversification
5) It has an experienced and qualified team
Venus Pipes and Tubes IPO
What are the IPO Offer’s Goals?
The IPO size for Venus Pipes & Tubes is Rs 165.4 crores, which will be used for the following:
In order to address long-term working capital needs.
General business reasons
Financing project expenditures for hollow pipe manufacturing capacity expansion, technology upgrades, operating cost optimization, manufacturing facility support, and backward integration.
APPLY OR AVOID – DELHIVERY IPO
Who are the promoters of Venus Pipes and Tubes Limited?
Megharam Sagramji Choudhary, Jayantiram Motiram Choudhary, Dhruv Mahendrakumar Patel and Arun Axaykumar Kothari are the promoters of the company.
Financial Track record of Venus Pipes and tubes Limited
|Financial Year ending / Period ending (Amt in Mns)|
|Profit After Tax||37.5||41.3||236.3||236.0|
Venus pipes and Tubes IPO – DRHP
Key reasons To Invest in Venus pipes and Tubes IPO
1) The company is a fast-growing stainless steel pipe and tube maker and exporter in India.
2) Steel pipes and tubes are the company’s specialty, with international accreditations, product certifications, and a multi-fold demand.
3) In the last three years and nine months, the company has had strong sales growth.
4) Company margins have increased dramatically, from Rs 3.7 crores (3.1 percent of revenues) in FY2019 to Rs 23.6 crores (7.5 percent of revenues) in FY2020 (FY21). It kept the same margins for the nine months ending December 21.
Risk factors in Venus pipes and Tubes IPO
1) The impact of the Covid-19 epidemic on its business is uncertain and unpredictable.
2) The company derives a major percentage of its revenue from its top ten customers, which could pose a danger in the future.
3) The company is up against other significant and well-established competitors. If they are unable to compete with them, demand for their products may decline.
4) The company does not have long-term arrangements with its customers for the purchase of its products, nor does it have long-term agreements with its suppliers for the delivery of raw materials.
5) Due to its limited operational experience in the highly competitive stainless steel pipes and tubes sector, the company confronts several hurdles that could impair its future performance.
Venus Pipes and Tubes IPO Dates – Subscription, Allotment and Listing Dates
|Finalization of Allotment||19-May-22|
|Initiation of Refunds||20-May-22|
|Credit to Demat Account||23-May-22|
|IPO Shares Listing Date||24-May-22|
Venus Pipes and Tubes IPO GMP –
Right now there is no GMP Trade — You can check your GMP section for GMP related updates of Venus Pipes or you can follow us on our Facebook page – Click here to follow
Venus Pipes and Tubes IPO – Should you Invest or not?
Venus Pipes and Tubes Limited is the fastest growing manufacturer and exporter of Steel Pipes and Tubes in India.
Company generated good revenue growth in the past.
Its margins are improving year on year.
Its issue price is fully priced.