Aeroflex Industries Limited IPO Closed

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IPO date 22 Aug 2023 – 24 Aug 2023
Listing date 01 Sep 2023
Price range 102 – 108
Minimum order quantity 130
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Incorporated in 1993, Aeroflex Industries Limited manufactures and supplies environment-friendly metallic flexible flow solution products that have applications in industries such as Steel, Oil & Gas, Chemicals & Petrochemicals, etc. The product portfolio of the company includes braided hoses, unbraided hoses, solar hoses, gas hoses, vacuum hoses, braiding, interlock hoses, hose assemblies, lancing hose assemblies, jacketed hose assemblies, exhaust connectors, exhaust gas recirculation (EGR) tubes, expansion bellows, compensators and related end fittings collectively known as flexible flow solutions. As of March 31, 2023, the company recorded more than 1,700 Product SKUs (Stock Keeping Units) in its product portfolio.

Aeroflex Industries is an export-oriented company with more than 80% of its revenue coming from exports to more than 80 countries including Europe, the USA, and others. For the financial ending March 31, 2023, 2022, and 2021, the company served a total of 723, 606, and 538 customers out of which 217, 190, and 169 customers span across 51, 49, and 43 countries and 506, 416, and 369 domestically.

Industry-wise revenue from operations (%)

Particulars FY23 FY22 FY21
Steel  22 22 27
Oil and Gas 19 16 14
Refineries 16 14 12
Fire sprinklers & fighting 16 24 20
Chemicals & Petrochemicals 16 15 16
Metals & Mining 8 7 8
Others 3 2 3

Financial information and other valuation metrics

Financial Year Total Assets (₹ crores) Total Revenue (₹ crores) Profit After Tax (₹ crores) EPS EBITDA (₹ crores)
March 31, 2021 161.6 144.8 6.01 0.53 22.3
March 31, 2022 183.4 241 27.5 2.41 46.7
March 31, 2023 214 269.5 30.15 2.64 54

About the industry

Globally, the market for Stainless Steel (SS) flexible hose was estimated to value at approximately $25 billion in 2020 with the size of SS corrugated hose estimated at $12.5 billion which is slated to grow to $38 billion and $18 billion by 2027, registering a CAGR of 7.5% and 6.3%, respectively.

Supported by favorable product attributes, the demand for SS flexible hoses is being driven by rapid urbanization which has accelerated the pace of the infrastructure developments and real estate construction that has triggered the demand for HVAC systems. Moreover, large-scale industrialization and modernization in agriculture and key manufacturing sectors are fueling the demand for SS corrugated hose

India’s exports of flexible tubing of iron/steel with/without fittings stood at Rs 5,258 million in FY22 growing by nearly 17.4% CAGR from FY18–FY22. In volume terms, exports stood at 9,320 tons in FY22 and grew by 10.7% CAGR from FY18–FY22.

Objects of the issue and proceeds utilization

The Rs. 351 crores public issue of Aeroflex Industries comprises a fresh issue of equity shares aggregating up to Rs. 162 crores and an offer for sale of shares worth Rs. 189 crores from existing shareholders.
Purpose Proceeds (₹ crores)
Funding working capital requirements 84
Prepayment or repayment of all or a portion of certain outstanding borrowings by the company  32
General corporate purposes Balance

Risk factors to consider

Exports-oriented risks: The company's exports contribute more than 80% of Revenue from Operations, out of which export to the USA constituted 28% of the revenue from operations for the financial year ending March 31, 2023. Any significant import duties or restrictions of the relevant jurisdictions and inability to comply with related requirements may have an adverse effect on the business and results of operations.

Supplier concentration and dependence on Chinese raw material: Top 5 suppliers contribute 74% of the total raw material of the company and the company is dependent on China for a significant portion (44%) of its raw material, any loss of any major suppliers may lead to increase in the cost of raw material by any supplier, or a shortfall in the availability or quality of raw materials, in a timely manner or at all could have an adverse effect on the business and results of operations.

Single manufacturing facility: The company is dependent on a single manufacturing facility. Any slowdown or shutdown in the manufacturing operations could have an adverse effect on the business, financial condition, and results of operations

Working capital management: Significant portion of working capital (80%) is consumed in trade receivables and inventories. Company’s inability to meet working capital requirements including failure to realize receivables and inventories may have an adverse effect on the results of operations and overall business.

IPO Schedule

Issue Period 22nd August to 24th August 2023
Deadline for accepting UPI mandate Until 5 PM on the issue closing day
Finalization of Allotment 25th August 2023
Initiation of Refunds 30th August 2023
Credit of Shares 31st August 2023
Date of Listing 1st September 2023
Mandate end date 8th September 2023
Anchor Investors Lock-In End Date 23rd September 2023

How to apply to the Aeroflex Industries Limited IPO?

You can apply for the Aeroflex Industries Limited IPO using any supported UPI app by following two steps:
  • Enter your bid on Kite
  • Accept the UPI mandate on your phone
On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.

How to check the allotment status for Aeroflex Industries Limited IPO?

You can check the allotment status for the Aeroflex Industries Limited IPO on the website of the Registrar and Transfer agent. Alternatively, you can also check the allotment status on the NSE website.