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<ul><li>The ₹412 crore IPO of kitchen appliances manufacturer Stove Kraft is now open for public subscription. </li><li>The IPO will remain open for subscription until January 28. </li><li>The shares were commanding a premium of ₹80-90 in the grey market over the set price band of ₹384-385 per share.</li><li>“Company’s brand value, margins and return on capital are lower than its peers so it won’t get such a premium valuation like its peers,” Angel Broking said in its report. </li></ul>The ₹412 crore initial public offering of kitchen appliances manufacturer Stove Kraft is now open for public subscription. This would be the fourth company to launch an IPO this year and second stake sale by private equity firm Sequoia Capital, which recently pared stake in Indigo Paints. The public issue has received mixed reviews from the brokerages, but the grey market is ready to pay a hefty premium for its shares. The shares were commanding a premium of ₹80-90 in the grey market over the set price band of ₹384-385 per share. However, the grey market is not an official measure of the market premium. But it is a fair indicator of demand for the shares in the market. Streets View: <keyword id="10631795" type="UNKNOWN" weightage="20" keywordseo="stove-kraft-ipo">Stove Kraft IPO</keyword> <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerage </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Recommendation </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Reliance Securities </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Neutral </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Angel Broking </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Neutral </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Axis Securities </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Not Rated </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Securities </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Not Rated </td></tr></tbody></table> Expensive valuation, weak financials, high manufacturing efficiency and others that led to mix reaction from analysts Aggressively valued IPO According to Angel Broking, the company has priced its issue at 34.5 times the earnings per share in the last 12 months. The metric is called price-to-earnings (P/E) ratio, which shows the price that the market is willing to pay for a stock based on its earnings. Higher the P/E, the more expensive the stock. Bigger peers like TTK Prestige and Hawkins Cookers, get a multiple of 61 times and 47.5 times respectively. While Stove Kraft seems cheaper, analysts aren’t very excited. “Company’s brand value, margins and return on capital are lower than its peers so it won’t get such a premium valuation like its peers,” the brokerage said. <div type="Article" hostid="261" msid="80442243" title="An American electric car maker explains why it took a different route than Elon Musk’s Tesla, Tata Motors or Mahindra" mstype="2" mssubtype="0"></div> Weak financials According to Reliance Securities, the Stove Kraft financials have not been “encouraging” despite seeing a remarkable improvement in margins in the past fiscal year. Even Angel Broking said that the profit for the last financial year ending March 2020 was driven by cost-cutting, which is not “sustainable”. <div type="image" title="Stove Kraft" msid="80444510" hostid="261"></div> The company’s net profit stood at mere ₹3.2 crore in FY20, which improved to ₹28.8 crore in the first half of 2021. However, Reliance highlighted that the company’s net worth stands at negative ₹30 crore as of September 2020. Lags behind its peers The analyst reports highlighted that despite being into operation for more than two decades and setting up a strong distribution network, it has not delivered up to the mark results. The company's business performance is substantially dependent upon its Pigeon and Gilma brands', which have been around for over 15 years. But, according to ICICI Direct, the company’s inability to maintain and promote the brand portfolio can impact future revenue growth. <div type="image" title="Stove kraft market share" msid="80444519" hostid="261"></div> Positives for Stove Kraft's ₹412 crore IPO Diversified kitchen and home appliances portfolio Since its inception, Stove Kraft has grown from a single brand small LPG stove manufacturing company to become one of India's leading manufacturers of kitchen appliances. Along with Pigeon and Gilma, the company has a Licensing agreement to manufacture small domestic appliances under the brand 'Black and Decker'. Expanding business The company recently expanded its production capacity from 19.5 million units per annum to 38.4 million units per annum. The facilities are backwards integrated with the ability to in-house manufacture components required for its products, which reduces its dependence on third-party suppliers and OEMs for its components. The company has an integrated facility at Bengaluru comprising 12 manufacturing units to manufacture pressure cookers, non-stick cookware, hard-odized cookware, mixer grinders, and induction cooktops LPG stove, glass cooktops, IR thermometer and handy vegetable chopper. SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/news/new-realme-stores-in-india-and-ceo-says-there-is-plan-for-new-devices/articleshow/80443801.cms" data-type="tilCustomLink">Realme plans to open 500 new stores in 2021⁠— the CEO reveals the company will go beyond smartphones in the 5G era</a> <a href="https://www.businessinsider.in/budget/news/indias-co-working-sector-wants-recognition-under-real-estate-tax-benefits-as-flexible-workspaces-aim-for-a-significant-revival-in-the-post-covid-era/articleshow/80431768.cms" data-type="tilCustomLink">India’s co-working sector wants recognition under real estate, tax benefits as flexible workspaces aim for a significant revival in the post-COVID era</a>

Sequoia-backed Stove Kraft IPO: The hefty grey market premium is not in sync with what analysts have to say

<ul><li>The basis of allotment for ₹412 crore initial public offering (IPO) of private equity firm Sequoia Capital-backed Stove Kraft will be announced on February 2.</li><li>The issue was subscribed 18 times the offer value until the last day of bidding.</li><li>Here's how to check <keyword id="10672665" type="UNKNOWN" weightage="20" keywordseo="Stove-Kraft-IPO-allotment-status">Stove Kraft IPO allotment status</keyword> on the registrar website and stock-exchanges.</li></ul>The basis of allotment for ₹412 crore initial public offering of kitchen appliances manufacturer Stove Kraft will be announced on February 2. The private equity firm Sequoia Capital-backed company clocked in a massive response from investors until the last day of subscription — the issue was subscribed 18 times the offer value. This was the fourth initial public offer this year after IRFC, Indigo Paints and HFCC recently concluded their IPO. According to data from the stock-exchanges, the issue received bids for 10.62 crore equity shares against the offered size of 58.94 lakh equity shares. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Stove Kraft IPO </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Qualified Institutional Buyer </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Non-institutional Investor </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Retail Individual Investor </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">No. of times issue subscribed </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.02x </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">32.72x </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">26.04x </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">18.03x </td></tr></tbody></table> The listing is scheduled for February 5th, and equity shares will be listed on both the exchanges — BSE and NSE. The public issue garnered a decent response in the grey market — the shares were commanding a premium of ₹60-65 over the set price band of ₹384-385 per share. While the grey market is not an official measure of the market premium, it is a fair indicator of demand for the shares in the market. Here’s how to check the <keyword id="10672667" type="UNKNOWN" weightage="20" keywordseo="Stove-Kraft-IPO-allotment">Stove Kraft IPO allotment</keyword> status: If you have bid for the <keyword id="10631795" type="UNKNOWN" weightage="20" keywordseo="stove-kraft-ipo">Stove Kraft IPO</keyword>, you can check your allotment status by following these simple steps: To check on the stock-exchange website: <ul><li>To check the Stove Kraft IPO allotment status, go to the<a href="https://www.bseindia.com/investors/appli_check.aspx"> BSE website</a> or <a href="https://www1.nseindia.com/products/dynaContent/equities/ipos/ipo_login.jsp">NSE website</a>.</li><li>On BSE, Select ‘Equity’ and then from the dropdown, select ‘Stove Kraft.’</li><li>Now, enter your application number and PAN.</li><li>Hit ‘Search’.</li></ul>Please note the details will only be available once the shares are allotted. You can also visit the Registrar website (<a href="https://ris.kfintech.com/ipostatus/ipos.aspx">KFintech Private Limited</a>) to check your application status. <ul><li>Since Link Intime India is the registrar for Stove Kraft IPO, you can visit its website <a href="https://ris.kfintech.com/ipostatus/ipos.aspx">here</a>.</li><li>Click on ‘Company selection’ and click on ‘Stove Kraft.’ It will only appear post allotment on January 29.</li><li>Once the company is selected, you will have to enter either your PAN detail, the application number, or client ID.</li><li>Enter the captcha and click ‘submit.’</li></ul>Your application status will appear on the screen once you click ‘submit.’ Please make sure the details provided are correct. It will show the number of shares you subscribed to and the number of shares allotted to you. SEE ALSO: <a href="https://www.businessinsider.in/budget/news/prime-minister-narendra-modi-signals-big-defence-budget-allocation-for-make-in-india/articleshow/80511082.cms" data-type="tilCustomLink">India’s Prime Minister Narendra Modi may just have signalled a big allocation for defence equipment manufacturing, 3 days before the budget</a> <a href="https://www.businessinsider.in/business/startups/news/priyanka-chopra-jonas-makes-another-tech-investment-this-time-in-us-based-rental-marketplace-apartment-list/articleshow/80554158.cms" data-type="tilCustomLink">Priyanka Chopra Jonas makes another tech investment – this time in US-based rental marketplace Apartment List</a>

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Sequoia-backed Stove Kraft IPO: The hefty grey market premium is not in sync with what analysts have to say

Navdeep Yadav

Stove Kraft IPO allotment: Here's how to check share allotment status

Navdeep Yadav

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