New Swan Multitech Limited IPO: Introduction

The Indian stock exchange is in a frenzy due to the upcoming New Swan Multitech Limited IPO scheduled for January 11, 2024. This SME (Small and Medium Enterprises) IPO has stirred interest amongst investors due to its focus on the burgeoning automotive components and engineering services sector. However, a thorough analysis is crucial before diving into the investment waters. This comprehensive blog delves deep into New Swan multi tech’s business operations, financials, IPO details, potential risks and rewards, and expert opinions, empowering you to make an informed investment decision.

New Swan Multitech Limited IPO: Company Overview

New Swan Multitech Limited (NSML) is a Delhi-based manufacturer of a diverse range of precision-machined components and assemblies for the automotive, engineering, and defence industries. Established in 1995, the company boasts a proven track record of catering to marquee clients like Maruti Suzuki, TATA Motors, Mahindra & Mahindra, and Indian Railways. NSML’s core competencies lie in:

• CNC machining:
  High-precision machining of complex components using advanced CNC machines.

• Sheet metal fabrication:
  Cutting, bending, and welding sheet metal components for various applications.

• Welding and assembly: Assembling components into subassemblies and complete units.

• Powder coating and painting:
  Providing protective and aesthetic finishes to manufactured parts.

NSML operates from two state-of-the-art manufacturing facilities situated in Delhi and Haryana. These facilities have cutting-edge machinery and boast stringent quality control measures, ensuring adherence to international standards.

New Swan Multitech Limited IPO: Financial Performance

While NSML isn’t a profit powerhouse, its financials have steadily risen. Key highlights include:

• Revenue:
  It increased from Rs. 11,770 lakh in FY21 to Rs. 15,142 lakh in FY23, indicating a 28% CAGR.

• Net Worth:
  Grew from Rs. 1,627 lakh in FY21 to Rs. 2,982 lakh in FY23, showcasing a healthy 83%CAGR.

• Profitability:
  Though modest, profitability has improved, with EBITDA margins increasing from 4.5% in FY21 to 7.2% in FY23.

New Swan Multitech Limited IPO: IPO Details

• Type:
  Book-building IPO

• Issue Size:
  Up to Rs. 33.11 crore (entirely fresh issue of 50.16 lakh equity shares)

• Price Band:
  Rs. 62 – Rs. 66 per share

• Opening Date:
  January 11, 2024
  
• Closing Date:
  January 15, 2024

• Listing:
  BSE SME Platform

• Lot Size:
  2,000 shares

New Swan Multitech Limited IPO: Growth Drivers

• Robust Indian Automotive Industry:
  The Indian automotive industry is projected to grow at a 10-12% CAGR over the next few years, presenting significant opportunities for NSML.
  
• Focus on Niche Segment:
  NSML operates in a niche segment of precision machined components, less susceptible to competition and commanding higher margins.

• Government Initiatives:
  Government policies like “Make in India” and “Atmanirbhar Bharat” are expected to boost domestic manufacturing, benefiting NSML.

• Experienced Management Team:
  The business has a seasoned management group with a wealth of automotive industry knowledge—components and engineering services sector.

 

New Swan Multitech Limited IPO: Potential Risks:

• SME Segment Volatility:
  SME IPOs are generally more volatile than those on mainboards.

• Competition:
  The company faces competition from established automotive component market players.

• Dependence on Key Clients:
  Dependence on a few large clients can impact revenue and profitability.

• Macroeconomic Uncertainties:
  A global economic slowdown or any disruption in the automotive industry can affect NSML’s performance.
  

New Swan Multitech Limited IPO: Expert Opinions

Analysts hold mixed views on the NSML IPO. Some highlight the company’s strong growth potential and focus on a niche segment, while others express concerns about SME volatility and dependence on key clients. It’s crucial to analyse these opinions objectively and form your judgment based on your risk appetite and investment goals.

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New Swan Multitech Limited IPO: Recommendation

New Swan Multitech Limited IPO offers an opportunity to invest in a growing company operating in a promising sector. However, it’s crucial to conduct exhaustive due diligence, factor in the risks involved, and compare the IPO with other investment options before deciding. Remember, high potential comes with high risk.

Disclaimer: This is not financial advice; you should always research before investing in any IPO.