ASK Automotive IPO is looking to raise Rs 834 crore which consists of entirely an offer for sale. The Offer comprises an Offer for Sale of up to 29,571,390 Equity Shares of face value of ₹ 2 each aggregating by the Promoter Selling Shareholders. ASK Automotive ,is an auto-ancillary player and is a manufacturer of advance braking systems (ABS) for two-wheelers in India as well as overseas.
IPO opens
November 7, 2023
IPO Closes
Nov 9, 2023
IPO Size (Rs.)
₹834.00 Cr
IPO Size (shares)
29,571,390 shares
Breakup
Entirely OFS
Face Value:
₹ 2/-
IPO Price in Rs :
₹268 to ₹282
Minimum Lot
53 Shares
Listing At
NSE , BSE
Anchor & QIB Quota
50%
NII Quota
15%
Retail Quota
35%
Lead Manager
ICICI Securities, JM, IIfl Securities, Axis
Registrar
Link Intime
About ASK Automotive Limited:
ASK Automotive commenced their operations in 1989 by manufacturing brake shoe products for 2Ws.
They have diversified their offerings to include :
AB systems;
•Aluminium Lightweighting Precision solutions
Wheel assembly to 2W OEMs
Safety control cables products.
Its operations are spread across 15 manufacturing facilities in India as of June 30, 2023, and its 16th manufacturing facility started in July 2023.
They supply in (i) the automotive sector for 2Ws, three wheelers (“3Ws”), passenger vehicles (“PVs”) and commercial vehicles (“CVs”), and (ii) the non-automotive sector for all-terrain vehicles (“ATVs”), power tools and outdoor equipment.
It is promoted by first generation entrepreneurs Kuldeep Singh Rathee and Vijay Rathee
Financials: ASK Automotive Limited
Particulars / Rs. In crore
2023(03)
2022(03)
2023(12)
2022(12)
2021(12)
Revenue from Operations
656.51
603.74
2,555.17
2,013.08
1,543.99
Revenue Growth (%)
8.74%
–
26.93%
30.38%
–
EBITDA
64.74
51.74
247.55
182.26
210.11
EBITDA Margin (%) as stated
9.85%
8.53%
9.65%
9.00%
13.40%
Profit before Tax
47.64
32.38
169.76
112.99
142.96
Net Profit
34.83
22.55
122.95
82.66
106.2
Net Profit Margin (%)
5.30%
3.72%
4.79%
4.08%
6.77%
Share Capital
39.43
40.18
39.43
40.18
40.69
Reserves
639.03
614.19
604.34
591.73
581.54
Net Worth
678.46
654.37
643.77
631.91
622.22
EPS – Basic & Diluted (₹)
1.77
1.12
6.18
4.09
5.22
RONW (%)
5.13%
3.45%
19.10%
13.08%
17.07%
Net Asset Value (₹)
34.41
32.57
32.66
31.46
30.58
Post issue Share Capital
39.83
FV
2.0
IPO price
282.0
EPS Fy23
6.2
PE Fy23
45.7
EPS Fy24 (annualized)
7.0
PE Fy24 (annualized)
40.3
Market cap in Lacs
5,616.0
Market cap / Sales
2.20
Anchor: ASK Automotive IPO
The anchor allocation of ₹250.17 crore of ASK Automotive IPO was spread across a total of 25 major anchor investors.
Anchor investor
Allocation
BNP Paribas Arbitrage ODI
8.80%
Nippon India Value Fund
6.00%
ICICI Pru Transport & Logistics Fund
6.00%
Goldman Sachs India Equity Portfolio
6.00%
SBI Life Insurance Company Ltd
6.00%
Tata Small Cap Fund
6.00%
Florida Retirement – Allspring
6.00%
NHIT Global Emerging Equity
6.00%
ICICI Pru Life Insurance Company
4.20%
Canara Robeco Small Cap Fund
4.20%
Turnaround Opportunities Fund
4.20%
Vikasa India EIF-I Fund
4.20%
Neuberger Berman Emerging Equity
3.06%
Societe Generale ODI
3.01%
Edelweiss Recently Listed IPO Fund
3.00%
ASK Automotive IPO: Salient Points
India is the largest motorized two-wheeler market in the world, with domestic sales of 16.25 million units in Fiscal 2023.
Revenue from 2W automotive sector contributed 92.39% of the revenue from operations of the company.
ASK Automotive is a leading player with more than 50 per cent market share as a brake shoe and advanced braking systems manufacturer.
ASK Automotive has in-house designing, developing and manufacturing capabilities.
Company’s offerings are powertrain agnostic, products to EV as well as internal combustion engine (“ICE”) OEMs.
Their brand “ASK” is recognized as the leading brand in the 2W IAM in terms of production volume for Fiscal 2023 in India.
Revenue from operations across offerings
Category / Rs million
3mFy24
%
3mFy23
%
Fiscal 23
%
Fiscal 22
%
Fiscal 21
%
Advanced braking Systems
2490.6
38%
2659.7
44%
10672.3
42%
9287.2
46%
8165.5
53%
Aluminium lightweight precision
2807.4
43%
2388.3
40%
9931.7
39%
7556.7
38%
4897.0
32%
Wheel Safety
895.5
14%
724.2
12%
3514.0
14%
2409.0
12%
1687.1
11%
control products
232.1
4%
150.2
2%
888.9
3%
509.7
3%
437.0
3%
Others
139.6
2%
115.0
2%
544.8
2%
368.3
2%
253.3
2%
Total from Operations
6565.1
100%
6037.4
100%
25551.7
100%
20130.8
100%
15439.9
100%
Its operations have grown to comprise 15 manufacturing facilities in India as of June 30, 2023, and it commenced operations at 16th manufacturing facility in July 2023.
In addition, their Joint Venture operates one manufacturing facility in Gurugram, Haryana, India.
Revenue from operations grew at a compound annual growth rate (“CAGR”) of 28.64% from ₹15,439.92 million in Fiscal 2021 to ₹25,551.67 million in Fiscal 2023.
In Q1 FY2024, consolidated sales were up by 8.74% to Rs 656.5 crore.
Its ABS products have high entry barriers with extensive and detailed vendor approval process of suppliers by OEMs and appropriate material selection.
Its ALS (aluminum light solutions) division is witnessing good growth and has a strong pipeline of new products for domestic and export markets to benefit from the growing Indian automotive industry needs.
The company shares strong relations with all the top two-wheeler manufacturers in the country.
It supplies to original equipment manufacturers (OEMs) like HMSI, HMCL, Suzuki, TVS, Yamaha, Bajaj, Royal Enfield, Denso, Magneti Marelli, and others. It also provides to the independent aftermarket and the export market through its manufacturing facilities.
Due to wearable nature products have good demand in aftermarket as well and company enjoys 50% share here also.
Peers: Listed peers as per RHP such as Endurance Technologies trades at P/E of 46.4, Uno Minda at PE 46.4of and Suprjit engineering at PE of 33.6.
ASK Automotive IPO is coming at a PE ratio of 45 (FY23) and 40x (FY24 annualized on Q1FY24 results).
I intend to apply in ASK Automotive IPO. The company seems to be have a technological base as well as is innovation based with good track record.
GMP as reported on social media is around Rs. 55.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.
