Day 2 of the ASK Automotive IPO: Verify Today’s GMP and Subscription Status

Up to 10.09 am on Wednesday, the second day of the share sale, the initial public offering (IPO) of auto ancillary player ASK Automotive, which began for public subscription on Tuesday, had garnered 47% of the total subscriptions. 96,77,111 shares of the Rs 833.91 crore have been bargained for so far, out of the 2,06,99,974 shares that are being offered.

Sixty-eight percent of the retail individual investor (RII) part was subscribed, while fifty-five percent of the non-institutional investor quota was subscribed. Three percent of subscriptions went toward the qualified institutional buyer (QIB) category.

IPO GMP for ASK Automotive Today

Market watchers claim that unlisted shares of ASK Automotive continue to trade for Rs 55 more on the black market than at the company’s issue price. The maximum issue price of Rs 282 per share is about 19.5% lower than the grey market premium, or GMP, of Rs 55. This indicates that the public issuance is expected to result in a 19.5% listing gain for the gray market.

The willingness of investors to pay above the issue price is shown by the “grey market premium.”

On the IPO of ASK Automotive

The IPO is an offer for sale (OFS) made by Kuldip Singh Rathee and Vijay Rathee, the founders, of 2,95,71,390 equity shares. The revenues from the IPO, which is entirely an OFS, will all go to the stockholders who are selling their shares.

The price range for each equity share in the offering is Rs 268–282. The IPO is anticipated to raise Rs 833.91 crore at the top end of the pricing range. Bids may be placed for multiples of 53 shares, with a minimum bid of 53.

Prior to the IPO, ASK Automotive had raised little more than Rs 250 crore from anchor investors.

The issue’s book-running lead managers are JM Financial Ltd., Axis Capital Ltd., ICICI Securities Ltd., and IIFL Securities Ltd. It is suggested that the equity shares be listed on the NSE and BSE.

Should You Purchase the ASK Automotive IPO?

Brokerage Swastika Investmart recommended subscribers with a rating of ‘Subscribe’, stating that the IPO is arriving at a reasonable 45.63 times PE (price-earnings) value. In light of these elements as well as the IPO’s long-term growth possibilities, we will subscribe to it.

For the IPO, BP Equities, another brokerage, has also recommended that investors “subscribe.” Regarding valuation, based on Q1FY24 annualized earnings, the issue is priced at a P/E of 39.8 times on the higher price band. Since the majority of the benefits seem to be priced into the offering, we advise a “Subscribe” for the advantage of listing gains for the issue, the statement said.

With high-performance driveline components and increased efficiency, the business has further reduced weight, improved performance, and improved vehicle acceleration, solidifying its position in the market.

The ASK Automotive Story

Gurugram-centered ASK Automotive has a significant market share of around 50% in the 2022 fiscal year, making it one of the leading producers of brake shoes and sophisticated braking systems for two-wheelers in India.

The company offers key technical solutions and safety systems, and it has its own in-house design, development, and production skills. TVS Motor Company Ltd., Hero MotoCorp, Greaves Electric Mobility, and Bajaj Auto are among the company’s clientele.

Strong ties exist between ASK and all of the leading two-wheeler producers in the nation. Its manufacturing method is centered on innovation and technology, and it boasts a strong production strategy.