United Heat Transfer IPO Analysis: 10 Key Points To Know

United Heat Transfer is about to enter the Indian SME IPO market and traders are eager to know if this IPO suits their portfolio. To make an knowledgeable choice, it’s important to interrupt down the corporate’s Red Herring Prospectus (RHP) and spotlight the important thing factors that matter to potential traders. Here’s our complete United Heat Transfer IPO evaluation overlaying key monetary ratios and different essential features:

1. United Heat Transfer IPO Analysis: Issue Size and Price Band

• Issue Size: The firm plans to boost INR 30 crore by way of this IPO.
• Price Band: The worth vary is between INR 56 – 59 per share.
• Lot Size: Investors want to purchase a minimal of 2000 shares (INR 1,18,000) per lot
• Bidding Dates: The bidding window opens on 22 October and closes on 24 October 2024.

2. United Heat Transfer IPO Analysis: Overview, Industry, and Operations

United Heat Transfer focuses on manufacturing various warmth trade gear, together with shell and tube warmth exchangers, air-cooled warmth exchangers, strain vessels, and course of stream skids. These merchandise are important parts for numerous functions, equivalent to petrol and diesel engines, railway engines, maritime engines, cruise and cargo ships, ferries, pleasure boats, marine diesel, mining vans, mega yachts, heavy engines, fishing boats, heavy vans, freighters, trawlers, heavy haulages, energy era units, supertankers, and off-highway engines.

The firm leverages its experience to assist the increasing nationwide and multinational Original Equipment Manufacturer (OEM) trade in areas equivalent to warmth exchangers, moisture separators, strain vessels, and course of stream skids. All merchandise are manufactured in compliance with the requirements set by the Tubular Exchanger Manufacturers Association (TEMA), making certain high quality and reliability. United Heat Transfer operates two manufacturing services in Nashik.

• Industry: Heat switch gear is a important part throughout a number of industries, and United Heat Transfer has constructed its repute on this area of interest. The international warmth exchanger market measurement was valued at USD 1,670 crore in 2020 and is projected to achieve USD 2,830 crore by 2030, rising at a CAGR of 5.5% from 2020 to 2030.
• Market Demand: With growing industrialization, the demand for warmth exchangers and strain vessels has proven regular progress. The international shell and tube warmth exchangers market is predicted to achieve USD 1,800 crore by 2033, with a CAGR of 4.1%.

Read Also: Usha Financial Services IPO Analysis: 10 key factors to know from RHP

3. United Heat Transfer IPO Analysis: Revenue and Profit Growth Trends

The monetary efficiency of United Heat Transfer is important to evaluate earlier than investing.

• Revenue: The firm posted a income of INR 60.19 crore in FY2024, which is a 13.95% decline from the earlier yr.
• Net Profit: Its web revenue for FY2024 was INR 6.24 crore, representing a CAGR of 102% from the previous three years.
• Profit Margins: The firm has maintained a revenue margin of 10.36% for FY 2024.

4. United Heat Transfer IPO Review: Financial Ratios to Watch

• P/E Ratio: The firm’s P/E ratio stands at 12.07, which is akin to trade friends.
• Return on Net Worth (RoNW): The RoNW for Fiscal 2024 is 30.62%, rising from 12.70% in Fiscal 2022, which signifies environment friendly use of shareholder funds.
• Debt to Equity Ratio: Pre-IPO, the corporate’s debt to fairness ratio is 1.81, which is on the upper aspect in comparison with the trade common.

The promoters of United Heat Transfer are Mr. Yogesh Viswanath Patil, Mr. Vivek Vishwanath Patil, Ms. Durva Yogesh Patil, and Mr. Shatanik Vivek Patil. They at the moment maintain 80.81 % of the corporate’s fairness.

• Promoter Experience: Mr. Yogesh Vishwanath Patil has greater than 29 years of expertise within the areas of Production, business and finance and of Heat Exchanger Industry. Mr. Vivek Vishwanath Patil has greater than 29 years of expertise within the areas of Design, Marketing and Administration. Currently, he manages the Design and Marketing features of the corporate.

Ms. Durva Yogesh Patil possesses a complete of 8 years of expertise. She has been related to the corporate for the previous 6 months, initially appointed as Non-Executive Director.

• Post-IPO Shareholding: Post-issue, the promoter’s shareholding shall be diluted to 59.20%, making certain that they nonetheless retain majority management.

6. United Heat Transfer IPO Review: Use of IPO Proceeds

Understanding how the corporate intends to make use of the raised capital is essential for assessing its progress potential.

• Repayment of Debt: A portion of the IPO proceeds will go in direction of decreasing the corporate’s present debt of INR 5.73 crore.
• To Meet Incremental Working Capital Requirements: INR 14 crore shall be allotted in direction of boosting working capital to assist the corporate’s enlargement plans.
• General Corporate Purpose: Remaining quantity shall be used for normal company functions.

7. United Heat Transfer IPO Review: Threats and Challenges

• The firm’s contingent liabilities as of 31 March 2024 had been INR 10.31 crore. If these contingent liabilities materialize, totally or partly, the monetary situation of the corporate could possibly be affected.
• The prime 5 prospects of the corporate contributed 67.65% of the income in FY 2024. The firm depends on these prospects for gross sales. Loss of any of those massive prospects might have an effect on revenues and profitability.
• Exports are depending on international locations together with France, Holland, Poland, Netherlands and the USA. United Heat Transfer generated virtually 8.84% of income in FY 2024 from these 5 international locations. Any battle with these international locations on the political degree will influence the income badly.
• Uniheat Research and Solutions – a gaggle firm of the United Heat Transfer – is concerned in the identical enterprise because the father or mother firm. Potential conflicts of curiosity might come up when allocating enterprise alternatives among the many firm and different promoter group entities. This may have an effect on the enterprise.

8. United Heat Transfer IPO Review: Peer Comparison

To get a clearer view of United Heat Transfer’s standing, evaluating it with friends like Patel Airtemp India and Anup Engineering may be helpful.

• United Heat Transfer, with a P/E ratio of 12.07, presents a steady funding alternative that appeals to worth traders searching for decrease threat. In comparability, its friends, Patel Airtemp India and Anup Engineering have considerably increased P/E ratios of 25.87 and 34.89, respectively. This distinction highlights totally different funding methods: United Heat Transfer is good for conservative traders, whereas Patel Airtemp India and Anup Engineering cater to these pursuing aggressive progress.
• Additionally, United Heat Transfer boasts a excessive Return on Net Worth (RoNW) of 30.62%, surpassing each Patel Airtemp India at 10.33% and The Anup Engineering at 19.38%.

9. United Heat Transfer IPO Review: Subscription Details and Investor Categories

• Retail Investors: 35% of the problem is reserved for retail traders.
• Non-Institutional Investors: 15% of the problem is reserved for high-net-worth people (HNIs) traders.
• Qualified Institutional Investors: The remaining 50% is allotted to institutional traders.

10. United Heat Transfer IPO Review: Should You Invest?

If you’re a conservative investor in search of worth, steady returns, and an organization with bettering monetary well being, United Heat Transfer’s IPO could possibly be a very good funding. The firm’s rising profitability, declining debt, and powerful RoNW and ROCE metrics make it enticing for long-term, low-risk portfolios.

However, if you happen to’re searching for aggressive progress and better returns, you could need to think about different choices in the identical sector with increased P/E ratios and extra threat tolerance.