The company is launching an Initial Public Offering Indobell Insulations IPO. Indobell Insulations Limited, established in 1972, specializes in manufacturing insulation products such as nodulated and granulated wool (including mineral and ceramic fiber nodules) and prefabricated thermal insulation jackets. These products are utilized across residential, commercial, and industrial sectors.
The company is launching an Initial Public Offering (IPO) with the following details:
- Issue Period: January 6, 2025, to January 8, 2025.
- Issue Price: ₹46 per share.
- Lot Size: 3,000 shares, requiring a minimum investment of ₹138,000.
- Issue Size: 22,05,000 equity shares, totaling ₹10.14 crore.
- Listing Date: Shares are expected to be listed on January 13, 2025, on the BSE SME platform.
The IPO proceeds are intended for capital expenditure on additional plant and machinery, working capital requirements, and general corporate purposes.
Potential investors should be aware of the company’s reliance on the power sector, exposure to geopolitical and currency risks, and the competitive nature of the insulation industry.
Who is the Owner of Indobell Insulation?
Indobell Insulations Limited is led by its Managing Director, Mr. Vijay Burman, who has been instrumental in steering the company since its inception in 1972.
The company’s board also includes Executive Director Mr. Man Mohan Burman, who has been associated with Indobell since 1988, and Executive Director Ms. Megha Burman, who joined in 2012.
These individuals are key figures in the ownership and management of Indobell Insulations Limited.
Indobell Insulations IPO Financial Performance:
- Revenue: The company reported revenues of ₹9.6 crore in FY22, ₹20.8 crore in FY23, and ₹17.9 crore in FY24, indicating a decline in the latest fiscal year.
- Net Profit: Net profits were ₹0.2 crore in FY22, ₹0.9 crore in FY23, and ₹1 crore in FY24, showing an improvement over the years.
Valuation:
- Earnings Per Share (EPS): The EPS for FY24 is ₹1.64.
- Price-to-Earnings (P/E) Ratio: At the issue price of ₹46, the P/E ratio is approximately 28.1x, which is relatively high compared to industry peers.
Indobell Insulations IPO Returns
The potential returns for the Indobell Insulations IPO will depend on the listing price and subsequent market performance. Below is a table that projects possible returns based on various listing price scenarios:
| Scenario | Issue Price (₹) | Listing Price (₹) | Profit/Loss per Share (₹) | Profit/Loss (%) | Total Profit/Loss (₹) (1 Lot: 3,000 Shares) |
| Bearish Case | 46 | 40 | -6 | -13.04% | -18,000 |
| Neutral Case | 46 | 46 | 0 | 0.00% | 0 |
| Moderate Gains | 46 | 50 | 4 | 8.70% | 12,000 |
| Optimistic Gains | 46 | 60 | 14 | 30.43% | 42,000 |
| Bullish Case | 46 | 70 | 24 | 52.17% | 72,000 |
Key Considerations:
- Breakeven Listing Price: ₹46 (at par with the issue price).
- Lot Size: 3,000 shares.
- Risk Factors: SME IPOs often experience high volatility. Gains/losses will depend on investor sentiment and market conditions at the time of listing.
Indobell Insulations IPO Growth
Below is a table showcasing Indobell Insulations Limited’s financial growth over the last three fiscal years. This highlights the company’s revenue, net profit, and margins to assess its growth trajectory.
| Particulars | FY22 | FY23 | FY24 | CAGR (%) |
| Revenue (₹ Cr) | 9.6 | 20.8 | 17.9 | 35.69% |
| Net Profit (₹ Cr) | 0.2 | 0.9 | 1.0 | 94.39% |
| Net Profit Margin (%) | 2.08% | 4.33% | 5.59% | – |
| Earnings Per Share (EPS) (₹) | 0.32 | 1.51 | 1.64 | 113.28% |
Key Observations:
Revenue Growth:
- Revenue grew significantly from FY22 to FY23 but saw a decline in FY24, indicating potential market or operational challenges.
Profitability:
- The company’s net profit has improved consistently, with better margins reflecting improved cost efficiency.
Earnings Per Share (EPS):
- EPS has shown remarkable growth, showcasing increasing value for shareholders over the years.
Growth Highlights:
- The company has demonstrated strong net profit growth and margin improvement, reflecting better operational efficiencies.
- However, the decline in FY24 revenue suggests the need for careful evaluation of future scalability and market risks.
Strengths of Indobell Insulation IPO
(1) Experienced Management Team:
- Established in 1972, the company benefits from its long-standing presence and leadership by experienced professionals, including its Managing Director, Mr. Vijay Burman.
(2) Diverse Product Portfolio:
- Indobell manufactures a wide range of insulation products, such as nodulated and granulated wool and prefabricated thermal insulation jackets, catering to residential, commercial, and industrial needs.
(3) Growing Demand for Insulation Products:
- Increasing energy efficiency requirements and the rise in infrastructure development could drive demand for the company’s products.
(4) Recent Profit Growth:
- The company has shown consistent improvement in net profits over the last few financial years, indicating operational efficiencies and better cost management.
(5) Utilization of IPO Proceeds:
- The funds will be used for capital expenditure (plant and machinery), working capital needs, and general corporate purposes, which could strengthen operational capabilities.
Risks of Indobell Insulation IPO
(1) Revenue Decline:
- The company’s revenue decreased in FY24, raising concerns about consistent growth and market competitiveness.
(2) High Valuation:
- At ₹46 per share, the Price-to-Earnings (P/E) ratio is approximately 28.1x, higher than the industry average, suggesting the shares might be overvalued.
(3) Reliance on Specific Industries:
- The company depends heavily on the power and infrastructure sectors. Any slowdown in these industries could adversely affect demand for its products.
(4) Competitive Market:
- The insulation market is highly competitive, with the presence of larger, more established players that may offer similar products at lower costs.
(5) Limited Market Presence:
- Indobell operates primarily in niche markets, which might restrict its ability to scale operations quickly.
(6) SME IPO Risks:
- Being listed on the BSE SME platform, the stock may have limited liquidity and higher volatility compared to mainboard stocks.
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