BikeWo GreenTech IPO: ₹59 to ₹62 Per Share - Opens 18th, Closes 20th September 2024

BikeWo GreenTech Limited, founded in December 2006, is an electric two-wheeler retailer in India. It has a presence in Telangana, Andhra Pradesh, Tamil Nadu, Maharashtra, and Gujarat. Operating through three dealership models—State, Diamond, and Platinum - BikeWo employed 36 staff as of 31st January 2024.

The company began in 2016 by trading used four-wheelers from authorised dealers. In 2022, seeing the potential of electric vehicles (EVs), BikeWo shifted to selling electric two-wheelers, launching stores in Andhra Pradesh and Telangana through franchises.

Their strategy focuses on expanding their EV network in Tier-I, II, and III cities, aiming for a strong dealership presence.

The company plans to grow in existing markets while expanding into Rajasthan, Kerala, Karnataka, and West Bengal.
BikeWo partners with leading EV brands like Ola Electric and Quantum e-scooters, offering a wide range of products. They also provide easy financing options and extended warranties to make EVs more accessible and affordable for customers.

The Objectives of the Issue

BikeWo GreenTech Limited intends to utilise the Net Proceeds from the Issue towards the following objectives:

• Funding the purchase of electric two-wheeler vehicles for selling and supplying the same to new and existing dealers;
• Funding capital expenditure proposed to be incurred towards setting up eleven dealership stores in various states in India;
• Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the Company; and
• General Corporate Purposes.

Highlights of BikeWo GreenTech IPO

BikeWo GreenTech IPO is set to launch with a book-built issue of ₹24.09 crores. The issue is entirely fresh. Here are the key details of the IPO:

• The IPO opens for subscription on 20th September 2024 and closes on 24th September 2024.
• The allotment is expected to be finalised on 25th September 2024.
• Refunds will be initiated on 26th September 2024.
• Credit of shares to Demat accounts is also expected on 26th September 2024.
• The company will tentatively list on NSE SME on 27th September 2024.
• The price band is set at ₹59 to ₹62 per share.
• The fresh issue comprises 38.86 lakh shares, aggregating to ₹24.09 crores.
• The minimum lot size for the application is 2000 shares.
• Retail investors need to invest a minimum of ₹124,000.
• The minimum investment for HNI is 2 lots (4,000 shares), amounting to ₹248,000.
• Khandwala Securities Limited is the book running lead manager for the IPO.
• Bigshare Services Pvt Ltd serves as the registrar.

BikeWo GreenTech IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 20th September 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors must complete their applications well before this deadline to avoid any last-minute technical issues or delays.

BikeWo GreenTech IPO Issue Details/Capital History

The BikeWo GreenTech IPO is scheduled from 20th September to 24th September 2024, with a price band of ₹59 to ₹62 per share and a face value of ₹10. The total issue size is 38,86,000 shares, raising up to ₹24.09 crores through a fresh issue. The IPO will be listed on NSE SME. The pre-issue shareholding is 91,57,250 shares.

BikeWo GreenTech IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:

Investors can place bids for a minimum of 2000 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: BikeWo GreenTech Ltd

Strengths:

• Premium EV retail business in India with dealerships for brands such as Ola Electric, Quantum escooters, Bounce, GT-Force, etc.
• Unique Business Model with presence in various states across India
• Continued expansion in the after-sales segment driving steady revenue growth and higher profit margins

Weaknesses:

• Limited geographical presence, currently in only five states
• Small employee base, potentially limiting rapid expansion capabilities

Opportunities:

• Planned expansion into new cities and states across India
• Growing demand for electric two-wheelers in India
• Potential for further partnerships with emerging EV brands

Threats:

• Intense competition in the rapidly growing EV retail sector
• Regulatory changes affecting the EV industry
• Dependence on EV manufacturers for product supply and quality
• luctuations affecting client spending on technology solutions

Financial Highlights: BikeWo GreenTech Ltd

Below are the restated financial results for the period from 31st December 2023 and the Fiscal years FY23, FY22, and FY21:

BikeWo GreenTech Limited has shown significant growth and fluctuations in recent years:

The company's assets have shown strong growth from ₹1,216.1 lakhs in FY21 to ₹3,016.07 lakhs as of 31st December 2023, representing a growth of about 148% over this period.

The company's revenue has fluctuated over the years. It decreased from ₹2,297.71 lakhs in FY21 to ₹1,391.71 lakhs in FY22, then increased to ₹2,061.86 lakhs in FY23. The revenue for the period ending 31st December 2023 stands at ₹1,807.2 lakhs, which suggests a potential for higher annual revenue if the trend continues.

The company's profitability has been volatile. It decreased from ₹47.27 lakhs in FY21 to ₹15.19 lakhs in FY22, further declining to ₹9.8 lakhs in FY23. However, there's a significant improvement for the period ending 31st December 2023, with a profit of ₹130.94 lakhs.

The company's net worth has shown consistent growth, increasing from ₹365.25 lakhs in FY21 to ₹1,640.43 lakhs as of 31st  December 2023, representing a growth of about 349% over this period.

Borrowings have increased from ₹850.85 lakhs in FY21 to ₹1,375.64 lakhs as of 31st December 2023, which may indicate investments in growth and expansion.

Overall, the company's financial performance shows a trend of asset growth and increasing net worth. The recent surge in profitability is a positive sign, but the historical volatility in revenue and profits suggests that the company operates in a dynamic and potentially challenging market environment. The increase in borrowings, coupled with growing assets, indicates that the company is in an expansion phase. Investors should consider these trends and fluctuations when evaluating the IPO.