Opened for subscription on Monday, the initial public offering (IPO) of Stove Kraft has a huge future growth prospective, but one should look at both, strength and risks while subscribing for an IPO.
Stovekraft has faced losses in FY2018 and has managed to generate thin margins in FY2019 and FY2020. Analysts said that the company’s brand value, margins and return on capital are lower than its competitors and advise only aggressive investors with high risk tolerance to participate in this IPO.
In FY19, the profits were a meagre Rs 50-70 lakhs for the first time. In FY20, the profits were made just before the launch of the IPO. These have been primarily because of reduction in its advertisement expenditure, brought down its employee cost and the company is not being charged taxes because of previous losses.
48,22,290 shares have been allotted to 32 anchor investors at Rs 385/share.