What You Must Know About Aeron IPO: Price Band ₹121 to ₹125 Per Share

Since its founding in 2011, Aeron Composite Limited has produced and supplied glass fibre-reinforced polymer (FRP) products, such as FRP rods, FRP moulded gratings, and FRP pultruded products, all of which are customised for a range of industrial uses.

The company's full solutions include conceptual design, prototype development, testing, manufacturing, logistical support, installation, and after-sales service.

The company's 26320 square meter manufacturing plant is situated in the Saket Industrial Estate. The plant holds an ISO 9001:2015 certification and designs, produces, and distributes FRP pultruded products, handrails, cable trays, fencing, moulded gratings, cross arms, poles, rods, and moulded mounting systems for solar panels (MMS).

433 employees worked for the company at different organisational levels as of July 31, 2024.

The Objective of the Issue

Funding the Capital Expenditure Requirements: The company plans to use the funds to set up an additional manufacturing unit to enhance its production capacity. This expansion aims to meet growing market demand, improve operational efficiency, and position the company for sustained growth in its industry.

General Corporate Purpose: The proceeds will also be allocated to general corporate purposes, including working capital needs, debt reduction, and other business activities. This objective ensures the company maintains financial flexibility and supports its ongoing operations and strategic initiatives.

Highlights of Aeron Composite IPO

Aeron Composite IPO is set to launch with a fixed price issue of ₹56.10 crores. The issue comprises a fresh issue of 44.88 lakh shares. Here are the key details of the IPO:

• The IPO opens for subscription on 28th August 2024 and closes on 30th August 2024.
• The allotment is expected to be finalised on 2nd September 2024.
• Refunds will be initiated on 3rd September 2024.
• Credit shares to Demat accounts are also expected on 3rd September 2024.
• The company will tentatively list on BSE SME on 4th September 2024.
• The price band is set at ₹121 to ₹125 per share.
• The lowest lot size for the IPO application is 1000 shares.
• Retail investors need to invest a minimum of ₹125,000.
• The minimum investment for HNI is 2 lots (2,000 shares), amounting to ₹250,000.
• Hem Securities Limited is the book-running lead manager for the IPO.
• Maashitla Securities Private Limited serves as the registrar.
• Hem Finlease is the market maker.

Aeron Composite IPO - Key Dates

Aeron Composite IPO Issue Details/Capital History

The book-built offering of Aeron Composite IPO is ₹ 56.10 crore. The issue of Aeron Composite IPO is the fresh issue of 44.88 lakh shares.

The subscription period for the Aeron Composite IPO begins on 28 August 2024 and ends on 30 August 2024. The allotment for the Aeron Composite IPO is anticipated to be completed on 2 September 2024. The tentative listing date for the Aeron Composite IPO is Wednesday, 4 September 2024, and it will take place on the NSE SME.

Aeron Composite IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:

A minimum of 1000 shares, as well as multiples of that number, are up for bid. The table below shows the minimum and maximum shares and the amount of investments made by HNIs and retail investors.

SWOT Analysis: Aeron Composite Limited

Strengths:

Niche Market Expertise: Aeron Composite specialises in composite products, giving it a strong foothold in a growing market with fewer competitors.
Innovative Technology: The company leverages advanced manufacturing techniques, setting it apart from traditional materials and appealing to industries seeking lightweight, durable solutions.

Weaknesses:

High Dependency on Specific Industries: Aeron Composite's success is closely tied to industries like construction and transportation, making it vulnerable to sector-specific downturns.
Capital-Intensive Expansion: The company’s plans to set up additional manufacturing units require significant capital, which could strain resources and affect profitability.

Opportunities:

Rising Demand for Composites: With increasing applications in various sectors, the demand for composite materials is expected to grow, offering Aeron Composite substantial expansion opportunities.
Global Market Expansion: There is potential for the company to enter new international markets, leveraging its expertise and technology to capture a broader customer base.

Threats:

Economic Downturns: A slowdown in key industries like construction or transportation could adversely impact demand for Aeron Composite’s products.
Competitive Pressure: The growing popularity of composite materials may attract more competitors, potentially eroding Aeron Composite’s market share and pricing power.

Financial Highlights: Aeron Composite Limited

Below are the financial results of the FY24 till February and the fiscal years FY23 and FY22:

Aeron Composite Limited has shown notable financial growth over the past few years, reflecting its expanding operations and improved profitability. By the end of February 2024, the company’s total assets had risen significantly to ₹9,979.42 crore, up from ₹6,910.21 crore in March 2023 and ₹6,063.23 crore in March 2022. This asset increase indicates the company's ongoing investment in its infrastructure and capabilities.

The revenue figures tell a story of strong sales performance, with the company generating ₹18,080.35 crore by February 2024, which is close to the total revenue of ₹18,199.26 crore for the entire fiscal year of 2023 and significantly higher than ₹10,992.5 crore in FY22. This consistent revenue growth highlights the company’s ability to sustain its market position and drive sales.

Profitability has also improved, with the profit after tax rising to ₹942.23 crore by February 2024, compared to ₹661.15 crore in FY23 and ₹362.12 crore in FY22. The company’s net worth has grown substantially, reaching ₹3,478.19 crore by February 2024, reflecting a robust increase in reserves and surplus.

Additionally, Aeron Composite has managed its debt effectively, with total borrowings slightly decreasing to ₹1,208.23 crore by February 2024 from ₹1,399.62 crore in FY23. This indicates a strong financial position with controlled debt levels, setting the stage for further growth and expansion.