H.M. Electro Mech Lists at 8% Premium, Shows Mixed Trading on BSE SME

resr 5paisa Research Team

Last Updated: 31st January 2025 - 12:16 pm

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H.M. Electro Mech Limited, an infrastructure company operating since 2003, marked its entry into the public markets on Friday, January 31, 2025. The company, which specializes in turnkey projects including supply, installation, testing, and commissioning of pumping machinery with operations across multiple states including Rajasthan, Maharashtra, and Karnataka, commenced trading on BSE SME with an initially positive but subsequently mixed performance.

H.M. Electro Mech IPO Listing Details

The company's market debut reflected measured initial enthusiasm followed by some profit-taking:

  • Listing Time & Price: When trading commenced at market open, H.M. Electro Mech shares debuted at ₹81 on BSE SME, delivering a modest premium of 8% to IPO investors against the issue price of ₹75. This measured opening came after strong IPO subscription numbers, suggesting a balanced market assessment of the company's infrastructure capabilities and growth prospects.
  • Issue Price Context: The moderate premium emerged after the company had strategically priced its IPO between ₹71 and ₹75 per share, ultimately fixing the final issue price at ₹75. This pricing approach appears to have struck a reasonable balance between company valuation and market expectations.
  • Price Evolution: By 10:56 AM IST, profit-taking pressure emerged with the stock trading at ₹77.11, representing a gain of just 2.81% over the issue price after touching an intraday high of ₹81 and low of ₹76.95, demonstrating some volatility in early trading.

 

First-Day Trading Performance 

The trading activity showed robust participation with balanced sentiment:

  • Volume and Value: Within the first few hours, 11.47 lakh shares changed hands, generating a turnover of ₹9.13 crore. Notably, 100% of traded shares were marked for delivery, indicating pure investment interest rather than speculative trading.
  • Demand Dynamics: The stock's trading pattern showed balanced two-way interest with buy orders for 2.19 lakh shares against sell orders for 1.66 lakh shares, reflecting measured market participation at current levels.

 

Market Sentiment and Analysis

  • Market Reaction: Decent opening followed by some profit booking
  • Subscription Rate: The IPO was substantially oversubscribed by 91.75 times
  • Pre-listing Interest: Anchor investors demonstrated confidence by investing ₹7.90 crore before the public issue

 

Growth Drivers and Challenges

Expected drivers of future performance:

  • End-to-end project solutions capability
  • Strong OEM relationships
  • Swift decision-making processes
  • Experienced management team
  • Emergency response capabilities
  • Robust order book of ₹183 crore
  • Diverse client base

 

Potential challenges:

  • Working capital intensity
  • Project execution risks
  • Competitive pressures
  • Government dependency
  • Seasonal revenue patterns
  • Partnership dependencies

 

Utilisation of IPO Proceeds 

The ₹27.74 crore raised through fresh issue will be used for:

  • Meeting working capital requirements
  • General corporate purposes

 

H.M. Electro Mech Financial Performance 

The company has shown steady growth:

  • Revenue increased to ₹117.30 crore in FY2024 from ₹101.67 crore in FY2023
  • H1 FY2025 (ended September 2024) showed revenue of ₹45.43 crore with PAT of ₹3.34 crore
  • Net worth of ₹35.42 crore as of September 2024
  • Manageable total borrowings of ₹7.33 crore

 

As H.M. Electro Mech begins its journey as a listed entity, market participants will closely monitor its ability to execute its strong order book and maintain operational efficiency. The moderate listing followed by some profit-taking suggests investors are taking a measured view of the company's prospects in the infrastructure sector, particularly given its established presence in government projects and diverse service offerings. The company's ability to capitalize on its relationships with OEMs and maintain execution quality will be crucial for sustained investor confidence.
 

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