The IPO Market is BOOMING. 6 Upcoming SME IPOs to Watch Next Week

Small is beautiful. This new mantra is delivering astonishing returns to investors, leaving blue-chip investors somewhat unsettled.

The real profit, it seems, lies hidden in the lesser-known and under-the-radar SME IPO market.

Out of the 105 SME IPOs listed on Dalal Street so far in the calendar year 2023, 84 have given positive returns. This translates into a win rate of 80%, which means four out of every five SME IPOs made money.

Out of them, 41 have turned into multibaggers, with the highest returns going up to 357%!

The spectacular bull run is now tempting investors to shift a part of their portfolios to chart-busting minion stocks.

Here are the six SME IPOs that are opening up for subscription next week.

#1 Master Components

First on the list is Master Components, with an issue size of Rs 154.6 million (m).

Master Components is engaged in manufacturing plastic engineering components and subassemblies.

Its industrial capital goods products are used as input by the following sectors: electrical, industrial, medical, and automotive.

The company's specialisation and primary activities are moulding the materials to produce its components.

Based on the company's DRHP, the company has seen a CAGR of 16% in revenue over the past three years. However, the net profit during the same period rose 3%.

The strong domestic demand has helped the company's growth.

The company proposes to utilise the net proceeds from the issue towards funding working capital requirements and general corporate purposes.

Here are the key details of the IPO.

Issue period: 18 September 2023 to 21 September 2023

Type of Issue: Book built issue of 1.1 m shares

Face value: Rs 10 per equity share

Price band: Rs 140 per share

Lot size: 1,000 shares

Application limit: Maximum one lot worth Rs 140,000

Tentative IPO allotment date: 26 September 2023

Tentative listing date: 29 September 2023

#2 Techknowgreen Solutions

Second on the list is Techknowgreen Solutions, with an issue size of 167.2 m.

Techknowgreen Solutions is an environmental consulting company in India.

Its key offerings include consulting, execution, and research in regulatory, sustainability, and technology domains.

It is one of the first companies in India providing environmental IT solutions through cutting-edge software applications and compliance solutions.

The company has diverse experience handling complex projects across various industries like infrastructure, chemical, automobile, and others.

As per the company's Draft Red Herring Prospectus (DRHP), in the financial years 2021-2023, the company achieved a revenue compound annual growth rate (CAGR) of 23.7%. While the net profit has shown compounded growth of 130%.

This growth was due to big-ticket projects and geographical expansion.

The funds raised from the fresh issue will be utilised for customer acquisition and retention, technology and product development, debt repayment, and general corporate expenses.

Here are the key details of the IPO.

Issue period: 18 September 2023 to 21 September 2023

Type of Issue: Book built issue of 1.9 m shares

Face value: Rs 10 per equity share

Price band: Rs 86 per share

Lot size: 1,600 shares

Application limit: Maximum one lot worth Rs 137,600

Tentative IPO allotment date: 26 September 2023

Tentative listing date: 29 September 2023

#3 Madhusudan Masala

Third on the list is Madhusudan Masala, with an issue size of 238 m.

Madhusudan Masala is a leading manufacturer of spices. The company manufactures more than 32 types of spices.

The company has been selling its products under the brand name 'Double Hathi' since 1977 and under the brand name 'Maharaja' since 2003.

Furthermore, it also generates revenue from trading whole spices and food grains through unbranded sales.

On a CAGR basis, over the last three years, the company's sales and profit have increased by 22.8% and 133.9%, respectively.

The robust domestic demand and brand recognition have helped the company's growth.

The company will use the net issue proceeds for working capital requirements amounting to Rs 160 m and the remaining for general corporate purposes.

Here are the key details of the IPO.

Issue period: 18 September 2023 to 21 September 2023

Type of Issue: Book built issue of 3.4 m shares

Face value: Rs 10 per equity share

Price band: Rs 66-70 per share

Lot size: 2,000 shares

Application limit: Maximum one lot worth Rs 140,000.

Tentative IPO allotment date: 26 September 2023

Tentative listing date: 3 October 2023

#4 Macro Cables & Conductors

Fourth on the list is Macro Cables & Conductors, with an issue size of Rs 187.3 m.

Marco Cables & Conductors are engaged in manufacturing and selling wires, cable wires, and conductors in India.

They supply the majority of their products to electricity boards of different states like Maharashtra, Gujarat, Tamil Nadu, etc., and turnkey contractors of India.

Marco Cables sells its products through a diversified sales & distribution mix, majorly by securing government tenders for supply to government projects, supplying EPC contractors for turnkey projects, and direct sales to a few private companies.

Over the past three years, the company has achieved a Compound Annual Growth Rate (CAGR) of 10.2% in sales and 186% in profit.

The robust growth was propelled by a solid customer base and marketing strategies.

The company will use net proceeds to fund capital expenditure requirements towards solar power systems and 1+12 rigid stranding machines, funding incremental working capital requirements and general corporate purposes.

Here are the key details of the IPO.

Issue period: 21 September 2023 to 25 September 2023

Type of Issue: Book built issue of 5.2 m shares

Face value: Rs 10 per equity share

Price band: Rs 36 per share

Lot size: 3,000 shares

Application limit: Maximum one lot worth Rs 108,000

Tentative IPO allotment date: 28 September 2023

Tentative listing date: 4 October 2023

#5 Mangalam Alloys

Fifth on the list is Mangalam Alloys, with an issue size of Rs 549.1 m.

Mangalam Alloys Limited is a manufacturer of stainless-steel-based products.

The company manufactures SS ingots, SS black bars, and fasteners in more than 30 international grades, and the sizes range from 3 mm to 400 mm.

It manufactures stainless steel ingots through three furnaces by melting stainless steel scrap and rolling ingots to stainless steel rounds & flats, followed by a heat treatment annealing furnace and bright bar unit.

Based on the company's RHP, the company has seen a CAGR of 3% in revenue over the past three years. However, it turned profitable in the past three years.

This was helped by the government's 'Make in India' initiative and steady market demand.

The company will use proceeds for working capital requirements, capital expenditure for business expansion, general corporate expenses and issue expenses.

Here are the key details of the IPO.

Issue period: 21 September 2023 to 25 September 2023

Type of Issue: Book built issue of 6.9 m shares

Face value: Rs 10 per equity share

Price band: Rs 80 per share

Lot size: 1,600 shares

Application limit: Maximum one lot worth Rs 128,000

Tentative IPO allotment date: 28 September 2023

Tentative listing date: 4 October 2023

#6 Hi-Green Carbon

Last on the list is Hi-Green Carbon, with an issue size of Rs 528 m.

Hi-Green Carbon is engaged in the business of waste tyre recycling.

The plant operates on a continuous pyrolysis process. It is an uninterrupted working method with a continuous feeding and discharging system controlled by the program logic controller system.

The plant is installed with recycling a capacity of 100 MT of waste tyres per day and sodium silicates 60 MT per day.

As per the company's DRHP, in the financial years 2021-2023, the company achieved a revenue compound annual growth rate (CAGR) of 870%. Meanwhile, the net profit has shown compounded growth of 376%.

The strong domestic demand helped the company's growth.

The company will use net proceeds to set up a new manufacturing unit in Maharashtra, working capital requirement, general corporate purpose, and public issue expenses.

Here are the key details of the IPO.

Issue period: 21 September 2023 to 25 September 2023

Type of Issue: Book built issue of 7.0 m shares

Face value: Rs 10 per equity share

Price band: Rs 71-75 per share

Lot size: 1,600 shares

Application limit: Maximum one lot worth Rs 120,000

Tentative IPO allotment date: 28 September 2023

Tentative listing date: 4 October 2023

Conclusion

Investing in SME IPOs can be compelling as some of them have strong growth potential, and are typically in their early stages of development.

This presents an opportunity for investors to enter at an early stage and potentially benefit from significant future expansion.

While investing in SME IPOs can be appealing, it is crucial to conduct thorough research before investing. Investors should carefully assess the company's financials and fundamentals to make informed investment decisions.

For more information on IPOs, check out the list of upcoming IPO's.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...