ASK Automotive IPO: ASK Automotive IPO opened for subscription on November 7 and was subscribed 38 per cent by the end of the first day of issue. The mainboard IPO will close on November 9. ASK Automotive IPO was subscribed 38 per cent on the first day of issue.

ASK Automotive IPO’s retail individual investors’ portion was subscribed 56 per cent on day one, the portion reserved for non-institutional investors (NII) portion was subscribed to 41 per cent, and the portion reserved for Qualified Institutional Buyers (QIB) was booked to 3 per cent.

ASK Automotive IPO has reserved not more than 50 per cent of the shares in the public issue for QIBs, not less than 15 per cent for NII, and not less than 35 per cent of the offer is reserved for retail investors.

Also Read: ASK Automotive IPO day 1: Issue subscribed 38%, retail portion booked 56%

ASK Automotive’s IPO price band is set at ₹268 to ₹282 per share at a face value of ₹2 per share. ASK Automotive IPO is a book-built issue of ₹834.00 crore. The issue is entirely an offer for the sale of 2.96 crore shares.

Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.

ASK Automotive IPO Promoters-The promoters of the company are Kuldip Singh Rathee and Vijay Rathee.

ASK Automotive IPO’s peers-The following are the listed industry peers of ASK Automotive, according to the RHP:

Endurance Technologies Limited: A leading manufacturer and supplier of aluminium die-casting components for the automobile. (P/E: 49.06)Uno Minda Limited: Engages in the manufacturing of auto components for the global and domestic automotive market. Manufactures diverse parts and accessories -brakes, gearboxes, axles, and road wheels, among others. (P/E: 69.82)Suprajit Engineering Limited: Manufactures mechanical control cables used in the automotive and non-automotive segments. (P/E: 26.20)Bharat Forge Limited: Operates in the Industrial and automotive business segment with a focus on metal forming. (P/E: 43.17)

ASK Automotive IPO market share -ASK Automotive’s market capitalisation is ₹5,559 crore and P/E (x) is 45.63. ASK Automotive is the largest manufacturer of brake-shoe and advanced braking (AB) systems for two-wheelers (2W) in India with a market share of approximately 50 per cent in fiscal 2023 in terms of production volume for original equipment manufacturers (OEMs) and the branded independent aftermarket, on a combined basis, according to the RHP.

ASK Automotive Group Companies-ASK Automotive’s group companies are SK Fras-Le Friction Private Limited, AA Friction Materials Private Limited, A.P. Automotive’s Private Limited, and Vijaylaxmi Infra Projects Private Limited, according to the RHP.

ASK Automotive IPO’s Product Range-ASK Automotive began operations in 1989 by manufacturing brake shoe products for 2Ws and has since diversified its operations to include offerings such as AB systems, and aluminium lightweight precision (ALP) solutions, where it is a prominent player for 2W OEMs in India with a market share of 9 per cent in Fiscal 2023 in terms of production volume, wheel assembly to 2W OEMs; and safety control cables products.

It supplies a portfolio of AB systems, ALP solutions, wheel assembly, and SCC products to OEMs in the automotive sector for 2Ws, three-wheelers (3Ws), passenger vehicles (PVs) and commercial vehicles, and the non-automotive sector for all-terrain vehicles (ATVs), power tools and outdoor equipment.

ASK Automotive Manufacturing Facilities-As of June 30, 2023, ASK Automotive operated 15 manufacturing facilities across five states in India, the majority of which are strategically located near OEM customers. the company recently commenced commercial manufacturing operations at the 16th manufacturing facility in Bhiwadi (Rajasthan) in July 2023.

It has also been allotted land in Kolar, Karnataka from the relevant regulatory authority, on which ASK Automotive proposes to develop a manufacturing facility. In addition, its Joint Venture operates one manufacturing facility in Gurugram, Haryana.

ASK Automotive IPO’s Financials-ASK Automotive Limited’s revenue increased by 26.78 per cent and profit after tax (PAT) rose by 48.75 per cent between the financial year ending with March 31, 2023, and March 31, 2022.

The company has posted a total income/net profit of Rs. 1567.77 crore / Rs. 106.20 crore (FY21), Rs. 2024.26 crore/ Rs. 82.66 crore (FY22), and Rs. 2566.28 crore / Rs. 122.95 crore (FY23).

The company’s revenue from operations has grown at a compound annual growth rate (CAGR) of 28.64 per cent between fiscals 2021 and 2023, and by 8.74 per cent from ₹6,037.35 million in the three months ended June 30, 2022, to ₹6,565.08 million in the three months ended June 30, 2023, according to the RHP.

ASK Automotive IPO Key Risks-Over 80 per cent of the company’s operating revenue in the last three fiscal years, which ended on June 30, 2022, June 30, 2023, and June 30, 2023, may be attributed to the Indian two-wheeler automotive industry. The business, operational outcomes, and financial situation could all be negatively impacted by any unfavourable changes in the two-wheeler automotive industry.

The availability and cost of their raw materials, including aluminium, are crucial to their operations and profitability. Any disruption to the timely and sufficient supply of raw materials, or volatility in raw material prices, could harm their operations, financial situation, and business.

The business does not have any exclusive agreements or definite obligations to supply any of its suppliers; instead, it depends on third parties to provide raw materials. The business, operational outcomes, and financial situation could all suffer from the loss of suppliers.

ASK Automotive Distribution-ASK Automotive supplies products to all of the top six 2W OEMs (in terms of production volume and value in fiscal 2023) in India, the largest motorized 2W market in the world, with domestic sales of 16.25 million units during fiscal 2023.

In Fiscal 2022, the company commenced commercial supplies to 2W EV OEMs in India, including TVS Motor Company Limited, Ather Energy Private Limited, Hero MotoCorp Limited, Greaves Electric Mobility Private Limited, Bajaj Auto Limited, and Revolt Intellicorp Private Limited. ASK Automotive has 16 to 30 years of customer relationships with all these firms, according to the RHP.

ASK Automotive Global Customers-In addition to customers in India, the company also increasingly caters to customers overseas, both in the automotive and non-automotive sectors through the export of AB systems and ALP solutions.

Automotive customers outside India include UFI Filters India Private Limited, Federal-Mogul Italy – racing & motorcycle division, and FDP Virginia Inc., and non-automotive customers outside India include Stanley Black & Decker, Polaris Industries Inc.,and MTD Products Inc.