United Heat Transfer IPO: ₹56 to ₹59; Issue Opens on 22nd Oct 24

United Heat Transfers Limited, incorporated in January 1995, manufactures essential equipment such as heat exchangers, pressure vessels, and process flow skids. The company's products are used in petrol and diesel engines, maritime vessels, mining trucks, and heavy machinery, among other applications. United Heat Transfer operates two manufacturing units in Nashik, equipped with modern infrastructure, including advanced technology and machinery that enhance productivity and efficiency. As of 31st July 2024, the Company employs approximately 105 employees on its payroll and 127 employees on a contractual basis.

The Objectives of the Issue

The Issue Proceeds from the Fresh Issue will be utilized towards the following objects:

• Repayment of Debt
• Meeting Incremental Working Capital Requirements
• General Corporate Purposes

Highlights of United Heat Transfer IPO

United Heat Transfer IPO is set to launch with a book-built issue of ₹30.00 crores. The issue is entirely a fresh issue. Here are the key details of the IPO:

• The IPO opens for subscription on 22nd October 2024 and closes on 24th October 2024.
• The allotment is expected to be finalised on 25th October 2024.
• Refunds will be initiated on 28th October 2024.
• Credit of shares to Demat accounts is also expected on 28th October 2024.
• The company will tentatively list on NSE SME on 29th October 2024.
• The price band is set at ₹56 to ₹59 per share.
• The fresh issue comprises 50.84 lakh shares, aggregating to ₹30.00 crores.
• The minimum lot size for the application is 2000 shares.
• Retail investors need to invest a minimum of ₹118,000.
• The minimum investment for HNI is 2 lots (4,000 shares), amounting to ₹236,000.
• Swastika Investmart Ltd is the book running lead manager for the IPO.
• Link Intime India Private Ltd serves as the registrar.

United Heat Transfer IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 24th October 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors are advised to complete their applications well before this deadline to avoid any last-minute technical issues or delays.
 

United Heat Transfer IPO Issue Details/Capital History

United Heat Transfer IPO is scheduled from 22nd October to 24th October 2024, with a price band of ₹56 to ₹59 per share and a face value of ₹10. The total issue size is 50,84,000 shares, raising up to ₹30.00 crores through a fresh issue. The IPO will be listed on NSE SME. The pre-issue shareholding is 1,39,20,000 shares, and the post-issue shareholding will be 1,90,04,000 shares. The company has raised ₹14.21 crore from anchor investors, with 24,08,000 shares allocated to them.
 

United Heat Transfer 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: United Heat Transfer Ltd

Strengths:

• Diverse customer base across various continents
• Knowledgeable and skilled team
• Meeting Industry Standards for high quality and reliability
• Strategic distribution channels and location

Weaknesses:

• Concentration of manufacturing facilities in one region (Nashik)
• Dependence on specific industries for product demand

Opportunities:

• Expansion into new geographical markets
• Potential for product diversification
• Growing demand in the industrial equipment sector

Threats:

• Fluctuations in raw material prices
• Intense competition in the industrial equipment manufacturing sector
• Economic slowdowns affecting key customer industries

Financial Highlights: United Heat Transfer Ltd

Below are the financial results for recent periods:

United Heat Transfer Limited has shown mixed financial performance in recent years. The company's revenue decreased by 9%, but profit after tax (PAT) rose by 195% between the financial year ending on 31st March 2024 and 31st March 2023. 

Revenue increased from ₹4,796.11 lakh in FY22 to ₹6,409.55 lakh in FY24, marking a growth of 33.6% over two years, despite a decline in FY24 compared to FY23. The company's profitability has improved significantly. Profit After Tax increased from ₹152.67 lakh in FY22 to ₹623.85 lakh in FY24, representing a substantial growth of 308.6% over two years.

Net Worth has shown strong growth, increasing from ₹1,202.32 lakh in FY22 to ₹2,865.24 lakh as of July 31, 2024, which represents an increase of about 138.3% over this period. 

Total Borrowings have fluctuated, decreasing from ₹3,761.47 lakh in FY22 to ₹3,202.13 lakh as of July 31, 2024, representing a reduction of about 14.9% over this period.

Investors should note the company's ability to improve profitability even in the face of revenue challenges. However, they should also consider the reasons behind the recent revenue decline and the company's strategies to address this. It's important to remember that past performance doesn't guarantee future results. Potential investors should evaluate these financial trends along with industry dynamics, competitive landscape, and the company's future growth strategies when considering the IPO.