Osel Devices IPO Lists at ₹198.05, Surges 23.78% Over Issue Price

Osel Devices Limited, a manufacturer of LED display systems and hearing aids, made a strong debut on the Indian stock market on Tuesday, 24th September 2024, with its shares listing at a significant premium to the issue price. The company's initial public offering (IPO) had generated robust demand from investors during its subscription period, setting the stage for an impressive market debut.

Listing Details

• Listing Price: Osel Devices shares were listed at ₹198.05 per share on the NSE SME platform, marking a strong start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a substantial premium over the IPO issue price. Osel Devices had set its IPO price band from ₹155 to ₹160 per share, with the final issue price being fixed at the upper end of ₹160.
• Percentage Change: The listing price of ₹198.05 on the NSE SME translates to a premium of 23.78% over the issue price of ₹160.

First-Day Trading Performance

• Opening Price: The stock opened at ₹198.05.
• Market Capitalisation: Market cap stood at ₹258 crore.
• Trading Volume: The indicative equilibrium quantity was 7,94,400 shares at the time of listing.

Market Sentiment and Analysis

• Market Reaction: The market reacted positively to Osel Devices' listing. The strong listing premium indicates robust demand and investor confidence in the company's prospects.
• Subscription Rate: The IPO was massively oversubscribed by 194.24 times, with non-institutional investors leading at 321.40 times subscription.
• Grey Market Premium: Prior to listing, shares were trading at a premium of ₹110 in the grey market, suggesting an expected listing gain of 69% that was partially realized at listing.

Growth Drivers and Challenges

Expected drivers of future performance:

• Comprehensive range of LED display systems and hearing aids
• Strong manufacturing capabilities with facilities in Greater Noida
• Diverse customer base including government entities

Potential challenges:

• Highly competitive and fragmented market segment
• Dependence on key customers like Artificial Limbs Manufacturing Corporation of India
• Sustainability of recent profit growth

Utilisation of IPO Proceeds

Osel Devices plans to use the funds for:

• Prepayment or repayment of certain loans
• Funding working capital requirements
• General corporate purposes

Financial Performance

The company has demonstrated strong financial growth:

• Revenue increased by 62% to ₹13,268.52 lakhs in FY2024 from ₹8,195.58 lakhs in FY2023
• Profit After Tax (PAT) rose by 180% to ₹1,305.21 lakhs in FY2024 from ₹466 lakhs in FY2023

As Osel Devices begins its journey as a listed entity, market participants will closely monitor its ability to leverage its manufacturing capabilities and diverse product portfolio to drive future growth and shareholder value. The strong listing and overwhelming subscription rates suggest positive market sentiment towards the company's prospects in the LED display systems and hearing aids sectors. However, investors may also be cautious about the sustainability of the recent profit growth and the company's performance in a competitive market environment.