Jaipur-based pipes manufacturer AIK Pipes and Polymers has announced the details of its upcoming initial public offering (IPO). The company has set the IPO issue price at Rs 89 per share and the IPO will open for subscription from December 26 to December 28, 2023.
AIK Pipes IPO Details
The AIK Pipes IPO is a fresh issue of 16.88 lakh equity shares by the company. Through the IPO, AIK Pipes aims to raise around Rs 15.02 crore. The shares are proposed to be listed on the SME platform of BSE.
The book running lead manager for the AIK Pipes IPO is Shreni Shares Limited. Skyline Financial Services Private Limited is the registrar to the issue.
Offer Objectives
As per the company, the net proceeds from the AIK Pipes IPO will be utilized for:
- Funding capital expenditure requirements
- Meeting working capital needs
- General corporate purposes
About AIK Pipes
Incorporated in 2018, AIK Pipes and Polymers Private Limited is a Jaipur-based company engaged in manufacturing MDPE (Medium Density Polyethylene) pipes and PPR (Polypropylene Random) pipes.
Products and Solutions
The company offers pipes and fittings meant for various end-use applications such as:
- Water distribution
- Gas transmission
- Sewerage & drainage systems
- Telecommunication infrastructure
- Agriculture applications
- Industrial applications
Production Facilities
AIK Pipes has a manufacturing facility located in Jaipur, Rajasthan with an installed capacity of manufacturing 9,000 MT per annum of MDPE and PPR pipes and fittings.
Competitive Strengths
Some of the key strengths and competitive advantages of AIK Pipes are:
1. Advanced Infrastructure
The company has invested in advanced infrastructure and machines at its manufacturing plant in Jaipur. This enables production of quality pipes meeting international standards.
2. Strategic Location
The manufacturing plant of AIK Pipes is strategically located, which allows easy access to raw materials as well as connectivity for distribution across India.
3. Experienced Management
The promoter and management team of AIK Pipes has significant industry experience, which helps in smooth business operations and sustainable growth plans.
Financial Performance
As per the red herring prospectus, the total income of AIK Pipes for FY2022 stood at Rs 25.54 crore compared to Rs 11.13 crore in FY2021. The net profit for FY2022 was Rs 1.38 crore versus Rs 0.35 crore in the previous year.
Should You Invest?
AIK Pipes IPO provides an opportunity to invest in a pipes manufacturing company focused on the fast-growing irrigation and plumbing sector in India.
Positive Factors
- Established track record and favorable industry growth outlook
- Advanced production infrastructure
- Quality products meeting international standards
- Strategic location of plant allows easy raw material sourcing and distribution
However, the IPO valuation seems expensive considering the company’s financial performance. Investors should make decision based on their risk appetite and investment horizon.