OBSC Perfection IPO Debuts on NSE SME with Strong Growth

OBSC Perfection Limited, a precision metal component manufacturer specializing in high-quality engineered parts for automotive OEMs and defense sectors, made a modest debut on the Indian stock market on Tuesday, 29th October 2024, with its shares listing on the NSE SME platform. The company, operating four manufacturing facilities across Pune and Chennai, has demonstrated significant growth with revenue increasing by 103.47% from ₹56.53 crore in FY22 to ₹115.03 crore in FY24.

Listing Details

• Listing Price: OBSC Perfection shares were listed at ₹110 per share at market open on NSE SME, marking a decent start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a modest premium over the IPO issue price. OBSC Perfection had set its IPO price band from ₹95 to ₹100 per share, with the final issue price being fixed at the upper end of ₹100.
• Percentage Change: The listing price of ₹110 on NSE SME translates to a premium of 10% over the issue price of ₹100.

First-Day Trading Performance

• Opening vs. Latest Price: Following its modest opening, by 10:43:48 AM IST, the stock was trading at ₹115.50, up 5% from its previous closing price.
• Market Capitalisation: As of 10:43:48 AM IST, the company's market capitalisation stood at ₹282.43 crore.
• Trading Volume: The traded volume was 21.88 lakh shares with a traded value of ₹24.47 crore, with 100% deliverable quantity.

Market Sentiment and Analysis

• Market Reaction: The market has responded positively to OBSC Perfection's listing, with the stock reaching the upper circuit at ₹115.50.
• Subscription Rate: The IPO was oversubscribed by 16.56 times (as of October 24, 2024, 6:19:59 PM), with NIIs leading at 25.87 times subscription, followed by retail investors at 16.20 times, and QIBs at 10.20 times.
• Trading Range: As of 10:43:48 AM IST, the stock hit a high of ₹115.50 and a low of ₹110.00 during early trading.

Growth Drivers and Challenges

Expected drivers of future performance:

• Strategic manufacturing locations in major automotive hubs
• Close supply chain with neighboring raw material suppliers
• Diversification into defense, marine, and telecom sectors
• Strong operational efficiency and cost control
• Experienced management team

Potential challenges:

• High competition in precision engineering sector
• Raw material price fluctuations
• Dependency on automotive sector performance
• Working capital intensive business

Utilisation of IPO Proceeds

OBSC Perfection plans to use the funds for:

• Purchase of machinery for Unit III in Tamil Nadu
• Purchase of machinery for Unit IV in Maharashtra
• Meeting working capital requirements
• General corporate purposes

Financial Performance

The company has demonstrated strong growth:

• Revenue increased by 20% to ₹11,611.41 lakhs in FY2024 from ₹9,691.03 lakhs in FY2023
• Profit After Tax (PAT) rose by 167% to ₹1,221.21 lakhs in FY2024 from ₹457.39 lakhs in FY2023

As OBSC Perfection begins its journey as a listed entity, market participants will closely monitor its expansion plans and ability to maintain growth momentum. The positive listing and continued upward movement suggest optimistic market sentiment towards the company's prospects in the precision engineering sector.