With the Endurance Technologies IPO, the company is not getting money from the issue - it is looking for the benefits of listing on stock markets. The current Rs 1,161 crore offer is for 17.5% of the company’s equity. The IPO opens today in a price band of ?467-472 a share.
The company is the dominant player in its space, and has the highest operating margins among all the players. It is the largest aluminium die casting manufacturer in India, and one of the leading automotive component manufacturers in aluminium casting for alloy wheels, suspension, transmission and brake systems. At a price to earnings (P/E) valuation of 22.8 compared to around 30 for competitors in its space, the listing would work both as a short-term and long-term hold.
The boost in the domestic auto sector in India and uptick in two-wheeler sales has helped Endurance's strong fundamentals - it is the largest supplier for two and three wheelers in India, and also supplies auto components to European 4-wheeler firms.India accounts for 70% of the company’s consolidated revenue, while the rest comes from Germany and Italy.
Risks: The company generates over 30% of its revenue from a single client, Bajaj Auto, which is experiencing a slowdown.
Experts have a universal consensus of "SUBSCRIBE" on this IPO.
| Angel Broking |
"Subscribe" |
"Healthy fundamentals, good P/E" |
| Nirmal Bang |
"Subscribe" |
"Company riding on auto sector growth" |
| Ajcon Global |
"Subscribe" |
"Endurance is the market dominant player" |
| IIFL |
"Subscribe" |
"Robust balance sheet" |
| Hem Securities |
"Subscribe" |
"Strong fundamentals" |
| Reliance Securities |
"Subscribe" |
"High-margin European clients" |