Prince Pipes IPO Reviews - Is it worth applying? What do brokerage houses recommend?

Prince Pipes IPO opened for subcription from Wednesday. At the price band of Rs 177-178 per share, the IPO is demanding a PE multiple of 23.5 times on a trailing basis.

Is it worth to apply for Prince Pipes IPO? Here are some reviews:

Reliance Securities: Subscribe

“It has healthy return ratios with average RoE of 22 per cent and RoCE of 20 per cent for the same period. Assuming revenue growth of 13 per cent CAGR through FY19-21E, the company is valued at 14 times of FY21E earnings, which appears to be justified considering its business model, steady growth and healthy return ratios. Hence, we recommend subscribe to the issue,” Reliance Securities.

Equirus Securities: Subscribe
“Construction ban in certain areas in North India will impact near-term growth. Post anti-dumping duty on CPVC resin from China/Korea, Prince was forced to raise CPVC price higher than others and this will impact growth/profitability,” it said. However, the brokerage said that there is a chance of “one-time valuation jump to IPO investors.”

Investmentz (Asit C Mehta): Subcribe

“With superior product mix, established brand name, strong distribution network, and adding capacities, we believe Prince Pipes is well placed to capitalize on domestic opportunities. At the upper price band of Rs178, the stock trades at 19.22 times its FY19 EPS of Rs 9.26,” it said

Ventura Securities: Subscribe for listing gains
Ventura Securities expects revenue, Ebitda and PAT of the company to grow at a CAGR of 5 per cent, 14 per cent and 18 per cent, respectively. For FY21, the stock is available at the offer price of 177-178 at 16 times on a fully diluted basis, this brokerage estimated.

BP Wealth: Do not subscribe

"Taking into account its debt position and the increased competitiveness of the market it operates in, the stock does not look attractive. We give ‘Avoid’ rating for the IPO,” it said.