The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

Stove Kraft IPO– Almost 20 yr old company involved in manufacturing, marketing and exporting kitchen appliances

Business — Company is into manufacturing LPG gas stoves, induction cooktops, non-stick cookware, pressure cookers, chimneys etc

Offer purpose — Offer for sale (412cr) including fresh issue of 95 cr. for repayment of debt and general purposes

Key domains -Company have three different segments. Pigeon for Mass market, Gilma for Mid level and Balck and Decker at top level premium category

Risks —

Company has yet to show sustainable profits.

It is operating in field of established players like Prestige, Hawkins so with such intense competition, profits margins will always face heat.

Company has ongoing litigation and not efficient to recover money from retailers.

Company has been into unrelated segments like LED which can derail the focus on key categories

Customers may not remain loyal as switching to other brands is easy, so basically no moat

Strength

Company has two under-utilised plants which can be ramped up without any major capex

Company have different brands catering to different segments and have good reputation of its products

Company has multiple distribution channels including e-commerce

Future

Market is expected to grow at 11% CAGR in near future

Company existing capacity is not fully utilised and with growth of overall market, company has room to grow

There is a systematic shift happening towards usage of kitchen appliances

Valuations

Recently turned profitable company with low ROE and margins seeking almost equal valuations as leaders in their categories

Bullish market and IPO frenzy makes the valuations stretched leaving little room for improvement

Should we apply?

People can subscribe for long term only if they want to bet on growth potential

If applying, recommended to sell on getting gains on listing day

One can avoid for investment purposes presently as there are better listed option available in market

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