In the bustling world of initial public offerings, seasoned market expert Anil Singhvi has cast his analytical eye on Lohia Corp’s upcoming IPO, offering a balanced perspective for potential investors. His scan highlights the company’s robust market position and reasonable valuations, alongside crucial risk factors that demand careful consideration.
Lohia Corp specializes in manufacturing machinery for Woven Raffia products, a niche where it holds significant global clout. Singhvi notes the company’s impressive 15.4% worldwide market share, positioning it as a global leader in its product segment. Domestically, Lohia Corp commands a dominant 40% market share in India for Woven Raffia machinery production, underscoring its strong leadership.
The company’s positive attributes extend beyond market dominance. Singhvi points to a professionally qualified and experienced management team, supported by strong promoters. He also finds the IPO valuations to be reasonable, particularly when compared to other entities in the absence of direct listed peers. Operationally, Lohia Corp has demonstrated solid growth, with margins improving from 9% to an impressive 19% over the past three years.
However, Singhvi is quick to highlight potential pitfalls. A significant concern is revenue concentration, with approximately 85% of the company’s earnings derived from a single type of machine. Furthermore, Lohia Corp exhibits considerable dependence on both exports and imports; it needs to export its finished products while importing essential raw materials, exposing it to global trade dynamics and currency fluctuations.
For investors, Singhvi offers differentiated advice. High-risk taking investors might consider applying for short-term listing gains, acknowledging the prevailing market sentiment. Conversely, low-risk investors are advised to approach the IPO with a long-term perspective. Regardless of the investment horizon, Singhvi strongly recommends setting a stop-loss at the IPO price to safeguard capital against potential post-listing dips. He suggests that while a chance can be taken, a positive market mood would be crucial for a favorable listing.
Simplifying the investment process, individuals can now easily participate in IPOs using India’s indigenous payment app, BHIM App. Investors can select their desired IPO through their Demat account, set a payment mandate, and complete the investment seamlessly using their BHIM App UPI ID.
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