ASK Automotive IPO Day 1: Know Price Band, Subscription, GMP, Other Details Here; Should You Subscribe?

ASK Automotive IPO: The initial public offering (IPO) of one of the largest players in the Indian auto ancillary industry ASK Automotive will open for subscription today (Tuesday). The three-day public issue will close for subscription on November 9. ASK Automotive shares are likely to get listed on Indian bourses on November 20. The price band of ASK Automotive IPO has been fixed between Rs 268-282 per equity share.

Ahead of the IPO launch, the company accumulated over Rs 250 crore from anchor investors on Monday. The company wants to raise around Rs 834 crore from the public issue. Shares of ASK Automotive Ltd are available at a premium of Rs 35 in the grey market today.

Looking at the valuation at the upper price band of the IPO presents a market capitalization of Rs 5,559 crore, with a price-to-earnings (P/E) ratio of 45.6 times on a consolidated basis.

Key things you should know about ASK Automotive IPO:

Issue Size:

The issue is entirely an offer for sale (OFS) of 2.95 crore equity shares and does not include any fresh issue component. Under the OFS, promoters Kuldip Singh Rathee and Vijay Rathee will sell 2.06 crore shares and 88.7 lakh shares, respectively.

Currently, Kuldip Singh Rathee holds a 41.33% stake in ASK Automotive, while Vijay has a 32.3% stake in the company.

Since the issue is entirely an OFS and there is no fresh issue component, the entire IPO proceeds, except the IPO expenses, will be received by the selling shareholders and the company will not receive any funds from the offer.

Minimum investment amount in ASK Automotive IPO:

Investors can place bids for a minimum of 53 shares and in multiples thereafter. 1 lot consists of 53 shares, this means the minimum investment amount in the IPO is Rs 14,946. According to IPOWatch website, retail investors can apply for up to 13 lots with 689 shares or Rs 194,298 amount. Approximately 50% of the net offer is reserved for qualified institutional buyers (QIBs), 35% for retail investors, and the remaining 15% is allotted to non-institutional investors (NIIs).

About ASK Automotive:

ASK Automotive Gurugram-based company which claims to be one of the largest manufacturers of brake-shoe and advanced braking (AB) systems for two-wheelers in India with a market share of approximately 50% in fiscal 2022.
ASK Automotive serves OEMs such as HMSI, HMCL, Suzuki, TVS, Yamaha, Bajaj, Royal Enfield, Denso, Magneti Marelli, and many more, OES, independent aftermarket and export markets through its 15 manufacturing facilities spread across the nation.

ASK Automotive IPO Important dates:

The IPO of ASK Automotive will open for subscription on November 9, while the public issue will conclude on November 10. The ASK Automotive IPO share allotment is expected to be finalized on November 15. ASK Automotive shares are likely to get listed on Indian bourses on November 20.

Should You Subscribe To The ASK Automotive IPO

Between FY21 and FY23, the company's revenue from operations rose at a CAGR of 28.64%, while EBITDA increased at a CAGR of 13.11%. In Q1FY24, the company's revenues rose 8% year-on-year at Rs 656 crore, while profit grew 55% to Rs 35 crore.

Analysts are positive about the IPO of ASK Automotive given the company's robust growth potential, and competitive advantage.

Valuation Metrics:

Looking at the valuation at the upper price band, the public issue presents a market capitalization of Rs 5,559 crore, with a price-to-earnings (P/E) ratio of 45.6 times on a consolidated basis.

ASK Automotive IPO GMP:

According to market observers, ASK Automotive shares are available at a premium of Rs 35 in the grey market today.