Amber Enterprises IPO Subscription Status, Should You Invest?

Amber Enterprises IPO, the ongoing public offer will close on January 19^th, 2018. The company has set the price band at Rs 855-859 per share. Amber IPO has planned to raise Rs 600 crore. The IPO consist of the fresh issue of up to Rs 475 crore and rest is the sale of shares to the tune of Rs 125 crore by promoters Jasbir Singh and Daljit Singh.

Amber Enterprise IPO Subscription Status

This IPO got fully subscribed on the first day of its share sale. in the Amber IPO, the portion of shares reserved for institutional investors were subscribed two times. The non-institutional and retail investors were subscribed 9% and 88%, respectively.

Further, Amber on the first day had raised Rs178.71 crore by selling shares to 15 institutional investors as part of its anchor book allocation. The institutional investors that participated in the anchor book allocation are Kuwait Investment Authority Fund, Abu Dhabi Investment Authority, Reliance Capital Trustee Co Ltd and Goldman Sachs India Ltd, among others.

On the second day it got subscribed by 2.09 times of the bidding process. As per NSE data showed till 17.00 hours (IST), the company has received subscriptions for 1,03,16,926 shares as against 49,27,351 on offer.

Amber IPO Proceeds

The company will use the funds raised for repayment of debt (Rs 400 crore) and general corporate requirements.

Key Customers

Amber’s key customers are LG, Daikin, Hitachi, Voltas, Panasonic and Whirlpool, which are leading brands in the RAC industry. Overall, the company’s customers command around 75 per cent share in the domestic RAC market.

Amber is considered as a one-stop solution provider for major brands in the Indian RAC market and the company serves eight companies out of top 10 RAC brands in India.

Should you Invest?

It is the Fourth IPO in January 2018. If we consider the higher end of the price band, the IPO is valued at P/E of 96.8x on FY17 basis (post dilution) and on annualized basis, it will be at P/E of 49.4x on H1FY18.  The competitor Dixon Technologies, is trading at P/E of 83.9x on FY17 basis and 66.5x on H1FY18 (annualised) basis, therefore the issue appears expensive. Further, the company has weak set of financials, which means that the growth of the company is not clear.