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Multibagger IPO: Himalaya Finance buys shares of this newly listed stock

Himalya Finance & Investment Company bought 5 million shares of Venus Pipes and Tubes through open market transaction on Thursday, December 1, 2022. The investment company purchased about 2.5% of the total equity at 650.42 per share via block deal, showed NSE data.

Venus Pipes shares made their stock market debut in May this year and the newly listed stock has given multibagger return by rallying more than 115% in about last six and a half months since its listing on the stock exchanges, from its initial public offering (IPO) issue price of 326 per share to currently hovering over 710.

The public issue of Venus Pipes and Tubes was subscribed 16.31 times which was opened from May 11, 2022 to May 13. The public issue comprised sale of 50.74 lakh fresh equity shares of the company and there was no offer for sale (OFS) component.

The Gujarat-based company is a growing stainless-steel pipes and tubes manufacturer and exporter in India. The company, under the brand name Venus, supplies its products for applications in diverse sectors, including chemicals, engineering, fertilizers, pharmaceuticals, power, food processing, paper and oil and gas.

For the quarter ended September 2022 of the current fiscal (Q2 FY23), the company reported a net profit of 10 crore as against 8.8 crore in the year ago quarter. Meanwhile, it reported total income of 127 crore during the quarter under review as compared to 89.5 crore during the corresponding quarter of the previous fiscal.

Venus Pipes and Tubes Ltd reported higher‐than‐expected EBITDA primarily due to higher volume and realisation. With new capacities Venus Pipes is set to become 2nd largest stainless steel manufacturer in India, as per brokerage Centrum which expects the company’s volume to grow by 32% CAGR over FY22‐FY25E.

“The growth triggers like volume expansion, higher exports, import substitution, margin expansion etc will enable EBITDA/PAT increase by 46%/48% CAGR over FY22‐FY25E. Besides, the proposal to bring anti‐ dumping duty on imports of stainless steel products is being evaluated by DGTR, if imposed, could turn to be big positive for Venus Pipes,” the brokerage said in a note last month.

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