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Sharp Chucks And Machines IPO entails the issue and sale of 29,04,000 shares (29.04 lakh shares aggregating to ₹16.84 crore in terms of total IPO size. Sharp Chucks And Machines is in the manufacturing of forging products, casting products, and machined components.

About Sharp Chucks And Machines IPO

• Sharp Chucks And Machines Ltd was incorporated in 1994.
• It manufactures forging and graded casting machined components for tractors and other automobiles.
• In addition, the company also makes power chucks, lathe chucks, drill chucks, and other machine tool accessories for tractors, automobiles, material handling & earth moving equipment.
• It broadly caters to the automotive, railways, defence, and the industrial tools segment.
• The company has two manufacturing units located in Jalandhar consisting of three foundries having an installed capacity of 30000 MTPA , Machining facilities consisting of VMC, CNC, and other machinery with installed capacity of 14400 MTPA, and one forging unit consisting of hammers, billiard heaters, etc. which has installed capacity of 3600 MTPA.
• The company has been promoted by Ajay Sikka and Gopika Sikka.

Financials: Sharp Chucks And Machines IPO

Sharp Chucks And Machines IPO: Salient Points

• Promoter holding will come down from 80.28% to 73% after the IPO.
• The OFS is by SIDBI Trustee Company Limited A/c India Opportunities Fund for 1928516 shares. It had invested in the company in 2010 and 2011. SIDBI is exiting completely. They just made about 5% return on their investment on a CAGR basis.
• It is an integrated Foundry & Forging Plant having all Manufacturing, Value-added and Quality Assurance facilities starting from In-house Pattern-making , Die Making to a Highly Precision Machine shop.
• Peers: It has shown Pritika Engg., Nelcast Ltd., and Bhagwati Autocast as their listed peers. They are trading at a P/E of 25.7, 48.7, and 23.5.
• Sharp Chucks And Machines IPO is coming at a PE ratio of 12.3x(fy23 earnings) .
• It performance has been steady.
• The company receives a majority of business from clients on repetitive basis.
• I have a neutral view on the IPO but may apply in Sharp Chucks And Machines IPO subject to availability of funds and response it garners.
• GMP as reported on social media was earlier Rs. 20-30, but some reports suggestit is around Rs. 10 now.
• Fedex Securities Pvt Ltd is the Lead Manager. Past issues handled by them include Kundan Edifice Limited, Pramara Promotions Limite, Yasons Chemex Care Limited, Pattech Fitwell Tube Components Limited, Lead Reclaim and Rubber Products Limited, Tapi Fruit Processing Ltd, Virtuoso Optoelectronics Limited, Kesar India Limited etc. with a mixed record wirh many issues closing in losse on the listing day.
• SME IPO are quite illiquid and volatile and exit options sometimes is delayed.
• There are reports that SEBI is of view that SME stocks prone to more market manipulation and SEBI may be looking to curb speculation in SME stocks.

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.