Emerald Tyre Manufacturers Lists at 90% Premium, Demonstrates Strong Market Confidence on NSE SME

Emerald Tyre Manufacturers Limited, a specialized manufacturer of off-highway tyres since 2002, marked a remarkable entry into the public markets on Thursday, 12th December 2024. The company, which has established itself globally with the GRECKSTER brand and strategic warehouses across Belgium, UAE, and USA, saw its shares begin trading on the NSE SME platform amid significant investor enthusiasm.

Emerald Tyre IPO Listing Details

The company's market debut reflected exceptional investor confidence in its business model and growth prospects:

• Listing Time & Price: When trading commenced at market open, Emerald Tyre shares debuted at ₹180.50 on NSE SME, delivering an immediate 90% gain to IPO investors. This strong opening validates the market's recognition of the company's established manufacturing capabilities and global market presence.
• Issue Price Context: The considerable premium emerged after the company had strategically priced Emerald Tyre IPO between ₹90 and ₹95 per share, ultimately fixing the final issue price at ₹95. This pricing approach successfully balanced retail investor accessibility with fair value for the company's growth potential.
• Price Evolution: By 11:13:47 AM IST, investor enthusiasm continued to build, pushing the stock to hit the upper circuit at ₹189.50. This represented a near-doubling of value at 99.47% above the issue price, demonstrating sustained buying interest throughout the early trading session.

Emerald Tyre First-Day Trading Performance

The trading activity showed robust participation and strong investor conviction:

• Volume and Value: Within just the first few hours, 16.21 lakh shares changed hands, generating a substantial turnover of ₹30.13 crore. Notably, 100% of traded shares were marked for delivery, indicating genuine investment interest rather than speculative trading.
• Demand Dynamics: The stock's appeal was evident in the order book, which showed tremendous buying pressure with orders for 18.66 lakh shares while sellers remained absent at the upper circuit. This imbalance highlighted strong investor belief in the company's long-term prospects.

Emerald Tyre Market Response and Subscription Analysis 

• Market Reaction: Strong buying interest with buy orders for 18.66 lakh shares with no sellers at upper circuit.
• Subscription Rate: The IPO was massively oversubscribed by 530.59 times, with NIIs leading at 912.18 times subscription, followed by retail investors at 558.11 times, and QIBs at 195.95 times.
• Pre-listing Interest: Grey market had indicated a 90% premium before listing.

Emerald Tyre Growth Drivers and Challenges

Expected drivers of future performance:

• Strong global presence with warehouses in Belgium, UAE, and USA
• Diverse product portfolio in material handling tyres
• Experienced management team
• Strong manufacturing capabilities
• Wide customer base across multiple countries

Potential challenges:

• High debt-to-equity ratio of 1.61
• Competitive tyre industry
• Raw material price volatility
• Global market risks

Utilization of IPO Proceeds 

Emerald Tyre Manufacturers plans to use the funds for:

• Capital expenditure requirements
• General corporate purposes
• Offer-related expenses

Emerald Tyre Financial Performance

The company has shown steady growth:

• Revenue increased by 2.37% to ₹171.97 crore in FY2024 from ₹167.98 crore in FY2023
• Profit After Tax rose by 36% to ₹12.14 crore in FY2024 from ₹8.93 crore in FY2023
• Four months ended July 2024 showed revenue of ₹64.93 crore with PAT of ₹4.14 crore

As Emerald Tyre begins its journey as a listed entity, market participants will closely monitor its ability to maintain growth momentum and expand its global presence. The strong listing and immediate upper circuit suggest robust investor confidence in the company's prospects in the specialized tyre manufacturing sector.