Dates: August 04, 2021 to August 06, 2021
Price Band: Rs. 118 to Rs. 120 per share
Minimum Lot: 125 shares
Minimum Application Amount: Rs. 14,750 to Rs. 15,000
Total Issue Size: Up to Rs. 161.09 Crs (Fresh issue Rs. 134.23 Crs and OFS Rs. 26.86 Crs)
Objects of the Offer:
The fresh issue proceeds are expected to be utilised towards funding of
1) Prepayment/repayment of certain secured borrowings worth Rs. 50 Crs;
2) Funding the working capital requirements worth Rs. 40 Crs; and
3) General corporate purposes.
Samco Research’s Stance:
Exxaro Tiles is engaged in the manufacturing and marketing of vitrified tiles used for flooring solutions. Having started its operation in the manufacturing of frits, over the years it diversified and expanded to its current status. It manufactures broadly two products i.e. double charge vitrified tiles and glazed vitrified tiles. Post listing too, the company would have a Mcap of under Rs. 500 Crs which makes it vulnerable to be added under the T2T segment where it might face speculative curbs. Exxaro operates in a highly competitive space with big and small fragmented players. On FY21 earnings, the issue is valued at price to earnings ratio of 35+ times and appears to be slightly expensive. Given the tiny size and premium in grey market, this IPO is a ‘SUBSCRIBE’ from a listing gains perspective but with extreme caution. Given that there are three other IPO issues at the same time, investors can take a decision to subscribe post assessing the response to Exxaro’s issue in the first two days of its issue period.