OBSC Perfection IPO : On October 29, OBSC perfection limited have made a decent trading debut by listing at 10% premium on NSE emerge platform.
OBSC perfection limited is a precious metal component manufacturer specialised in high quality engineered parts used in defence and automotive sectors.
The company have been manufacturing from 4 major centres in Pune and Chennai.
OBSC perfection limited have listed themselves on the price of 110 rs per share on NSE SME. It shows a decent commencement of the journey of public traded company.
The company have set it’s IPO Price band from 95 to 100 rupees per share, with final issue price being fixed at upper end of 100 rupees.
The listing price (110) translate 0% premium over the hundred rupees of issue price.
About 66 crores worth of share was listed for trading from October 22 October 24. During these three days the share went over subscribed by 16.56 times. Where company received bits for total 7.27 crore shares compared with 43.9 lakh shares on offer.
The portion reserve for (NII) was overbid by almost 26 times, while the retail investor segment was subscribed 16.26 times. For international buyers it was overbooked by 10.20 times.
The factors that drives such over enthusiastic response from market towards IPO of OBSC can be traced from –
- Strategic locations – the company have set up its manufacturing units at a strategically advantageous position compare to its competitors.
- Close supply chain with neighbouring raw material suppliers – since the company have also ensured app close range of supply chain investors are much more comfortable in it.
- Diversification into defence Marine and automative sectors – because the company have diversified demands, therefore it offers a relatively shock resistant investment then any other of its competition.
- Strong efficiency – the investors have witnessed a strong operational efficiency plus the cost control in management in company, have given confidence to investors.
However it is not all green all white scenario for the company either. before investing one should take the challenges for company in future into account as well.
- High competition – there is very high competition precision engineering sector especially stemming from western countries therefore, giving a tough way to grow for companies.
- Price fluctuation – because of the supply chain diversification many of the countries which are supplier of crucial raw materials are either in war or in words of Geo political tension, therefore, a fluctuating prices of raw materials.
- Dependency on automatic sector – Despite diversification, the majority of there revenue sources from automotive sector therefore making it’s demand a derived one and highly related to automobile sectors. Because of it investors who are already invested in automobile sector will prefer them less.
However unlike majority of companies the vision of OBSC regarding the funds collected from IPO is quite clear. Not only they will ensure machinery purchase in there manufacturing units of Tamilnadu and Maharashtra but also they will be meeting their working capital requirements.
All of it will definitely attract seasoned investors into the companies IPO and that is what we are witnessing it in the performance of its IPO.
Disclaimer: Demat Dive is not giving any buying advice on any stock. Consult a SEBI registered advisor before investing anywhere.
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