Amber Enterprises IPO: Is it a Good Investment?

Amber Enterprises IPO is here to subscribe and will be available till 19th, January 2018. Should you invest in this IPO and see if you get it or should you wait till it comes to the market?

Here are some insights that will help you to make an informed decision. So far it has been subscribed 75 times.

Amber IPO Details

The company will mop up Rs 475 crore by issuing new stock while promoters Jasbir Singh and Daljit Singh will sell part of their stake to raise the remaining amount.

It will be the third IPO of 2018 after Apollo Micro Systems and Newgen Software, and follows a record year of maiden offerings 36 companies raised about Rs 67,000 crore.

Amber Enterprises’ Rs 600-crore initial share public offering was fully subscribed on the first day of its bidding on 17th Jan,2018.

The IPO received bids for 50.93 lakh shares against the total issue size of 49.27 lakh scrips, registering a subscription of 1.03 times, data available with the National Stock Exchange (NSE) showed.

Experts vs First Time Investors

If you are a first time investor, it’s better to research in depth about the company and then go ahead, but we are saving your time by giving you a background of what all should be considered while purchasing shares in IPO

Amber Enterprises Information

Amber Enterprises India Ltd is a prominent solution provider for Air conditioner OEM/ODM Industry in India.

It has a dominant presence in RACs complete unit and deals in major RAC components with 10 manufacturing facilities across India focusing in on different product segments.

With expertise in components like heat exchangers, sheet metal components, injection molding components, and system tubing and motors, Amber is strongly positioned with its backward integration to derive the core deliverable’s in terms of quality, cost & delivery.

It offers higher energy efficiency and expertise in indoor, outdoor, split and window AC units. We deal in AC components as well as non-AC components.

Performance of Amber Enterprises

Amber Enterprise shows steady revenue growth in recent years. Top-line has been increasing regularly for the last 5 years and jumped from INR 882 Cr in FY 2013 to INR 1652 Cr for the period ended FY 2017.

Though the company has shown steady growth in revenue, the company has also registered growth in profits in these 5 years. Starting from INR 19 Cr of profits in FY2013, the company’s earnings improved to INR 28 Cr for the period ended FY 2017.

Strengths of Amber Enterprises:

It contains diversified portfolio which includes RACs, RAC components and Non-AC components.

Few of their clients include Mahindra, Godrej, Blue Star, Hitachi, LG, Daikin, JOHN DEERE, Panasonic, Voltas , Whirlpool which brings in a very good reputation for Amber enterprises.

Amber Enterprises is the largest original equipment maker, with a market share of 55.4 percent as of March last year.

Capacity utilization levels are sub-50 percent, indicating not much capex in the immediate future.

Its revenue has been growing at an annualized rate of 17 percent, while net profit rose at 9 percent in five years to March 2017.

Earnings before interest, tax and depreciation and amortization grew at a CAGR of 23.5 percent, while EBITDA margins expanded 150 basis points in the last five years to 7.8 percent, this itself indicates that it has good scope for good future profits.

Boost to Mutual Funds

It’s the third IPO of 2018 after Apollo microsystems  and NewGen software leading to IPO market of 67000 crore. All this increase in funds into the capital market through Initial Public Offerings (IPOs) have not just improved the market in terms of market capitalisation, but has also boosted the investor’s sentiment.

Because of more and more number of companies getting listed, Mutual Fund companies are also getting more option of companies to invest in. All this has ultimately increased the number of people willing to invest in the market through mutual funds.

First time investors prefer investing in mutual funds rather than directly investing in the market because mutual funds are basically a portfolio of different stocks and so the risk gets reduced.