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Auto Impex & Chemical IPO plans to raise Rs. 27.07 crore. The issue will open on May 11, 2023 and close on May 15, 2023. The offer is a combination of fresh issue(29.2 lakh shares) and an offer for sale of 5.50 lakh shares from the selling promoter shareholder. Auro Impex & Chemicals is engaged in manufacturing, exporting, and supply of Discharge & Collecting Electrodes, and Electrostatic Precipitator (ESP) internal parts and spares.

• Auro Impex & Chemicals Limited (AICL) was founded in the year 1991 by Mr. Madhusudan Goenka in Kolkata, West Bengal with the name of Auro Enterprise.
• Auro Impex & Chemicals Limited t specializes in the manufacturing, exporting, and supply of discharge and collecting electrodes, and electrostatic precipitator (ESP) internal parts and spares.
• They also provide niche ESP electrical control solutions making use of the latest available technology for the same to lower outlet emissions.
• The company is headquartered in Kolkata, West Bengal. They have a state-of-the-art manufacturing facility near Kolkata, with an ISO 9001:2015 certification. They have an expansive distribution network – both domestic and international.
• Auro Impex & Chemicals Limited supplies their products to a wide range of industries, including steel, cement, power, and mining. They have a loyal client base and ever-expanding distribution network, which is a testimony to their quality products and services.
• Auro Impex & Chemicals has been selling its products through renowned OEMs and Service Providers such as Thermax Limited, Larsen & Toubro Limited, KC Cottrell India Private Limited, Isgec Heavy Engineering Limited, Hariaksh Industries Private Limited, Par Techno-Heat Pvt Ltd, Filter Flow Engineering Private Limited, Imeco Overseas Private Limited and other Brand owners.
• Auro Impex & Chemicals Limited has 123 employees on its payroll as of May 8, 2023.

Auro Impex & Chemicals IPO: Financials

Salient Points

• AICPL is a market leader in the manufacture of discharge and collecting electrodes, and ESP internal parts and spares.
• The company has a diversified product profile including Electrostatic Precipitators (ESPs), Porcelain Hollow, Wall through & Rapping drive Bushings, Rappers Mechanical, ESP Internal Components etc which primarily find use in power, cement, sugar and steel industries..
• There has been a good rise in revenues which is majorly driven by increased market share and catering to larger customer base.
• It is in the process to envisage a new High Frequency Transformer Rectifier (HFTR) manufacturing unit to diversify its product range and become one stop solution for
• its clients.
• The prospects of the Cold Roll Formed Electrostatic Precipitators are strongly correlated and linked to the performance of the various industries such as steel, power, cement, sugar, paper etc.
• The company is facing increasing competition from Chinese manufacturers.
• The operations of the company are working capital intensive as the company has to keep adequate raw material in its inventory. The operating cycle have been at 55 days in FY22.
• IPO proceeds will be utilized primarily for funding incremental working capital requirements of the Company ( 1508 lacs)

• Auro Impex & Chemicals has increased the issue size in a jiffy in matter of few days as per RHP dated 01.05.23 and 06.05.23.
• In the revised RHP company has done away with requirement of anchor investors which was there in first RHP.
• Ratings assigned to the bank facilities of Auro Impex & Chemicals Limited (AICL) :

• It has availed term loans from Indian Bank and Bank of Baroda.
• First mandate from a new Lead Manager Affinity Global Capital Market Pvt. Ltd.
• PE ratio is 41x (fy22 earnings)  and 16x (fy23 ). There has been a big jump in profits in last 2 years though revenue has also increased. Still the pricing is steep.
• I intend to apply in Auro Impex & Chemicals IPO though it is rather risky and there are valid concerns about company changing dates, IPO size, doing away with anchor investors all at the very last minute. This is purely driven by current momentum in SME shares which could fade away anytime. Also its overall assessment like other SME issues remains hazy due to limited information.
• SME IPO are more volatile and I generally exit on the listing day, many times in pre open session.
• Rikhav Securities is the Market Maker which was previous associated with Homesfy Realty IPO, MOS Utility IPO and Anlon Technology Solutions all of which had a good listing on the bourses.
• Please do your own diligence as SME IPOs are more volatile and risky than mainboard IPOs and need more funds.

• 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. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.