StoveKraft IPO Review: This section of investors should buy - Anil Singhvi reveals complete strategy
StoveKraft IPO Review: Should you invest in this initial Public Offering (IPO)? What should be the strategy to invest in this public issue? Who should invest in this stock and for listing gains or for long term view? Know what Zee Business Managing Editor Anil Singhvi has to say about StoveKraft IPO! The Market Guru said that this is a good brand with strong marketing network
StoveKraft IPO Review: Should you invest in this initial Public Offering (IPO)? What should be the strategy to invest in this public issue? Who should invest in this stock and for listing gains or for long term view? Know what Zee Business Managing Editor Anil Singhvi has to say about StoveKraft IPO! The Market Guru said that this is a good brand with strong marketing network. StoveKraft will reduce its debt from the money raised through the IPO, Singhvi said. StoveKraft is an Indian company that manufactures cooking appliances under Pigeon and Gilma brands.
On negatives, he said that the financials of StoveKraft are week. Around the time of unveiling IPOs, companies are made to look good on paper and that is in this case too, the Managing Editor said. In FY19, the profits were a meagre Rs 50-70 lakhs. Before this period, there has been no profit. In FY20 there is a profit just before the launch of the IPO, he pointed out.
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StoveKraft profits have been primarily because of three reasons – one is that the company reduced its advertisement expenditure, brought down its employee cost and third is that the company is not being charged taxes because of previous losses. These are the three reasons why StoveKraft was among the profits in FY20 and it cannot e said with certainty if it could be sustained.
If StoveKraft has to compete with peers like Hawkins and Prestige, it cannot do without advertisements. He said that it is still not known why they have reduced their employee cost.
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स्टोव क्राफ्ट IPO में पैसे लगाएं या नहीं?
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He further said that the quota of retail investors in StoveKraft IPO is only 10 per cent than the usual 15 per cent. It is because StoveKraft has not seen profits for three years.
StoveKraft IPO – Anil Singhvi recommends this strategy
He said that it does not look like StoveKraft valuations are at par with the peers Hawkins and Prestige. Investors with high-risk appetite who know how to exit after listing – in profit or loss – can invest in this issue. Considering the current mood around the IPOs, investment can be made for small listing gains.
In terms of quality and financials, it is not very impressive, the Market Guru said.
People who don’t want to take risk can leave this issue, he further said.
Any strategy with regards to long term investment could be suggested once StoveKraft management speaks on the concerns raised, Singhvi said.
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