Shubhshree Biofuels Energy Limited IPO Review
Neutral119-119 · SME
✦
Analyst Verdict
Shubhshree Biofuels Energy Limited IPO
Neutral
IPO at a Glance
Price Band
119-119
Issue Size
17cr
Min. Investment
₹1,42,800
Opens
2024-09-07
Closes
2024-09-09
Listing
2024-09-14
Category
SME
Key Strengths
✓The company’s factory is in Tonk, Rajasthan, which has a location advantage as it procures most of the raw material requirements relating to agricultural waste from the farms which are located at nearby locations.
✓The company provides eco-friendly products viz. Bio-pellets and briquettes are considered to be a good substitute for fossil fuels in those industries where the use of fossil fuels such as coal, gas, lignite, diesel, etc. is made in large quantities.
✓The company can benefit from the Government’s push to increase the use of Biomass pellets in briquettes as the Ministry of Power has mandated that all coal-based thermal power plants of power generation utilities with bowl mills, shall on an annual basis mandatorily use a minimum of 5% blend of biomass pellets made, primarily, of agro residue along with coal with effect from FY 2024-25 which shall increase to 7% with effect from FY 2025-26.
Key Risks
⚠The biomass fuel industry is a relatively new concept and is yet to have a defined market as compared to conventional fuels, leading to some resistance from potential customers to switch to biomass fuel.
⚠The company generates nearly 71% of its revenue from its top 5 clients. The loss of any such key clients, a significant reduction in the demand from such clients, or deterioration in their financial condition may adversely affect the business.
⚠The company generates almost entire of its sales from certain geographical regions especially Northern states like Haryana, Uttar Pradesh, Rajasthan, and NCR region. Any adverse developments affecting the operations in these regions could adversely impact the business.
⚠The business is subject to seasonal variations that could result in fluctuations in the results of operations.
⚠Any rise in costs or a deficiency in the availability of the raw materials that it procures could adversely impact the company’s sales, profitability, and operational results.
Frequently Asked Questions
Should I apply for Shubhshree Biofuels Energy Limited IPO?
Based on our analysis, our rating for Shubhshree Biofuels Energy Limited IPO is: Neutral. Review the full analysis including strengths, risks, and financials on CheckIPO before making a decision.
What are the key risks of Shubhshree Biofuels Energy Limited IPO?
The biomass fuel industry is a relatively new concept and is yet to have a defined market as compared to conventional fuels, leading to some resistance from potential customers to switch to biomass fuel. The company generates nearly 71% of its revenue from its top 5 clients. The loss of any such key clients, a significant reduction in the demand from such clients, or deterioration in their financi
What are the strengths of Shubhshree Biofuels Energy Limited IPO?
The company’s factory is in Tonk, Rajasthan, which has a location advantage as it procures most of the raw material requirements relating to agricultural waste from the farms which are located at nearby locations. The company provides eco-friendly products viz. Bio-pellets and briquettes are considered to be a good substitute for fossil fuels in those industries where the use of fossil fuels such
What is the price band of Shubhshree Biofuels Energy Limited IPO?
The price band for Shubhshree Biofuels Energy Limited IPO is 119-119. The IPO has closed.
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