Studds Accessories Ltd, one of India’s leading two-wheeler helmet manufacturers, saw its Initial Public Offering (IPO) get booked 73.25 times on the final day of subscription
The public issue, sized at roughly ₹ 455.49 crore, received bids for approximately 39.92 crore shares against ~ 54.5 lakh shares on offer.
Key Details of the IPO
- Company: Studds Accessories Ltd (brand: Studds, SMK) – manufactures two-wheeler helmets and accessories.
- Issue size: ~₹ 455.49 crore; entirely an Offer-for-Sale (OFS) of ~77.86 lakh shares.
- Price band: ₹ 557 to ₹ 585 per share.
- Final day subscription breakdown:
- Qualified Institutional Buyers (QIBs): ~160 times.
- Non-Institutional Investors (NIIs): ~76.99 times.
- Retail Individual Investors (RIIs): ~22.09 times.
Why the Strong Demand?
Several factors help explain why the IPO drew such strong interest:
- Market leadership: Studds claims to be the largest two-wheeler helmet manufacturer in India by revenue and the largest globally by volume. mint
- Growth tailwinds: With rising two-wheeler usage, regulatory helmet mandates and premiumisation in accessories, demand dynamics favour helmet makers.
- Branding & exports: The company markets both mass (Studds) and premium (SMK) brands and exports to 70+ countries, adding global appeal.
- IPO structure: The OFS structure may have attracted existing shareholders monetising, while new investors saw listing gain potential (indicated by grey market premium).
What This Means for Investors
- A high subscription ratio suggests strong listing demand, often pointing toward a potential listing gain for investors (although not guaranteed).
- However, subscription alone does not guarantee long-term returns—investors should still evaluate fundamentals, valuation, and growth outlook.
- At the upper price band (₹ 585), the company’s valuation implied a P/E multiple of ~33.1x based on FY25 earnings, per some broker commentary. mint
- The grey market premium (GMP) reported around ₹ 65-67 implies an anticipated listing price in the ~₹ 652 range (11% above upper band) at that time.
Things to Watch Post-Listing
- How the stock performs on listing day and subsequent weeks—whether it sustains the premium or corrects post listing.
- Company’s execution: capacity expansion, cost of raw materials (helmet manufacturing is raw-material sensitive), export growth, brand premium gains.
- Two-wheeler industry dynamics: growth of motorcycle/scooter demand, regulatory helmet safety mandates, and competitive pressures.
- Valuation discipline: with high subscription and strong listing expectations, the company will need to meet growth expectations to justify value.
