What You Must Know About Shubhshree Biofuels Energy IPO: Price Band ₹113 to ₹119 Per Share

Established in 2013, Shubhshree Biofuels Energy Limited manufactures and supplies biomass fuels, including biomass pellets and briquettes. These alternative energy sources are primarily used for commercial and industrial heating, cooking fuel, industrial burning, and electricity generation, substituting for fossil fuels like coal, firewood, and lignite.

Key highlights of Shubhshree Biofuels Energy's operations include:

• The manufacturing facility is at Khasra No 33/1, Village Pahadi, Teh. Niwai, District Tonk Rajasthan.
• Three briquettes cum pelleting machines with a combined capacity of 132 tonnes per day.
• Primary customer base in Northern India, especially Haryana, Uttar Pradesh, Rajasthan, and NCR region.
• Significant growth in sales volume: from 9,700 tonnes in FY 2022 to 121,800 tonnes in FY 2024.
• 26 employees as of March 30, 2024.

The company's product portfolio includes:

• Biomass Pellets
• Biomass Briquettes

These products cater to sectors like recycling, textile processing, pharmaceutical, and metal industries.

The Objectives of the Issue

Shubhshree Biofuels Energy Limited intends to utilise the net proceeds from the IPO for the following purposes:

• Capital Expenditure: Funding the installation of additional plant and machinery.
• Working Capital: Meeting the working capital requirements of the company.
• General Corporate Purposes: For various corporate activities aligned with the company's strategic goals.

Highlights of Shubhshree Biofuels Energy IPO

Shubhshree Biofuels Energy IPO is set to launch with a book-built issue of ₹16.56 crores. The issue is entirely fresh. Here are the key details of the IPO:

• The IPO opens for subscription on 9th September 2024 and closes on 11th September 2024.
• The allotment is expected to be finalised on 12th September 2024.
• Refunds will be initiated on 13th September 2024.
• Credit of shares to Demat accounts is also expected on 13th September 2024.
• The company will tentatively list on NSE SME on 16th September 2024.
• The price band is set at ₹113 to ₹119 per share.
• The fresh issue comprises 13.92 lakh shares, aggregating to ₹16.56 crores.
• The minimum lot size for the application is 1200 shares.
• Retail investors need to invest a minimum of ₹142,800.
• The minimum investment for HNI is 2 lots (2,400 shares), amounting to ₹285,600.
• Hem Securities Limited is the book-running lead manager for the IPO.
• Bigshare Services Pvt Ltd serves as the registrar.
• Hem Finlease is the market maker responsible for 72,000 shares.

Shubhshree Biofuels Energy IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 11th 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.

Shubhshree Biofuels Energy IPO Issue Details/Capital History

The Shubhshree Biofuels Energy IPO is scheduled from 9th September to 11th September 2024, with a price band of ₹113 to ₹119 per share and a face value of ₹10. The total issue size is 1,392,000 shares, raising up to ₹16.56 crores through a fresh issue. The IPO will be listed on the NSE SME, with the shareholding increasing from 3,850,000 pre-issue to 5,242,000 post-issue. Hem Finlease is the market maker responsible for 72,000 shares within the issue.

Shubhshree Biofuels Energy 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 1200 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: Shubhshree Biofuels Energy Ltd

Strengths:

• Rapid growth in sales volume and revenue over the past three years
• Strategic location in Northern India, close to key customer markets
• Diversified customer base across various industries
• Focus on renewable energy sources, aligning with global sustainability trends

Weaknesses:

• High concentration of sales in specific regions
• Dependence on a few key customers (top 5 customers contribute over 57% of revenue)
• Limited manufacturing capacity compared to total sales volume

Opportunities:

• Growing demand for alternative energy sources
• Government mandates for biomass usage in thermal power plants
• Potential for geographical expansion and increased market share
• Scope for diversificat

Threats:

• Fluctuations in raw material availability and prices
• Intense competition in the biomass fuel sector
• Regulatory changes affecting biomass production or usage
• Economic downturns impacting customer industries

Financial Highlights: Shubhshree Biofuels Energy Ltd

Below are the financial results for the period ended March 31, 2024, and the Fiscal years FY23, FY22, and FY21:

Shubhshree Biofuels Energy Limited has demonstrated exceptional financial growth over the past three fiscal years. The company's assets have grown dramatically, increasing from ₹185.61 lakhs in FY22 to ₹1,396.84 lakhs in FY24, representing an impressive growth of 652.6% over two years. This substantial increase in assets indicates significant investments in the company's operational capabilities and infrastructure.

Revenue has shown remarkable growth, rising from ₹791.82 lakhs in FY22 to ₹9,414.60 lakhs in FY24, marking an extraordinary increase of 1088.9% over two years. The year-over-year growth from FY23 to FY24 was 60.6%, indicating strong and sustained demand for the company's products.

The company's profitability has seen a similar upward trajectory. Profit after tax rose significantly from ₹27.46 lakhs in FY22 to ₹329.77 lakhs in FY24, representing an extraordinary growth of 1101.3% over two years. This sharp rise in profits suggests improved operational efficiency and effective cost management as the company scaled its operations.
Net worth has shown consistent and strong growth, increasing from ₹14.12 lakhs in FY22 to ₹711.27 lakhs in FY24, a growth of 4935.9% over two years. This substantial increase reflects the company's ability to generate and retain earnings, significantly strengthening its financial position.

Interestingly, despite the rapid growth in operations, the company's total borrowings have remained relatively low and even decreased from ₹91.06 lakhs in FY23 to ₹60.66 lakhs in FY24. This suggests that the company has been able to fund its growth largely through internal accruals and efficient working capital management.