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Shubhshree Biofuels Energy Ltd IPO
Status: Closed
Overview
IPO date
09 Sept 2024 to 11 Sept 2024
Face value
₹ 10 per share
Price
₹ 113 to ₹119 per share
Issue Size
1,392,000 shares
(aggregating up to ₹ 16.56 Cr)
(aggregating up to ₹ 16.56 Cr)
Allotment Date
12 Sept 2024
Listing at
NSE
Issue type
Book Building - SME
Sector
Miscellaneous
Objectives of Shubhshree Biofuels Energy Ltd IPO
Initial public offer of upto 13,92,000 equity shares of face value of
Rs. 10/- each (the "Equity Shares") of Shubhshree Biofuels Energy Limited ("The Company" or "The Issuer" or "SBEL")) at an issue price of Rs. 119 per equity share for cash, aggregating up to Rs. 16.56 crores ("Public Issue") out of which 72,000 equity shares of face value of Rs. 10 each, at an issue price of Rs. 119 per equity share for cash, aggregating Rs. 0.86 crores will be reserved for subscription by the market maker to the issue (the "Market Maker Reservation Portion"). The public issue less market maker reservation portion i.e. issue of 13,20,000 equity shares of face value of Rs. 10 each, at an issue price of Rs. 119 per equity share for cash, aggregating upto
Rs. 15.70 crores is here in after referred to as the "Net Issue". The public issue and net issue will constitute 26.55% and 25.18 % respectively of the post-issue paid-up equity share capital of the company.
Shubhshree Biofuels Energy Ltd IPO Strategy
- Capitalize on the government awareness towards use of biomass.
- Focus towards increasing the share of manufactured goods.
- Widening its customer base.
- Increasing its geographical presence.
About Shubhshree Biofuels Energy Ltd
Shubhshree Biofuels Energy Ltd was incorporated as Shubhshree Bricks Private Limited' , pursuant to a Certificate of Incorporation dated April 23, 2013, issued by the RoC, Rajasthan, Jaipur. The name of Company was changed from 'Shubhshree Bricks Private Limited' to 'Shubhshree Biofuels Energy Private Limited' dated October 30, 2023. Subsequently, Company was converted from a Private Company to a Public Company, and the name was changed to 'Shubhshree Biofuels Energy Limited' vide fresh Certificate of Incorporation dated February 1, 2024 issued by the Registrar of Companies, Rajasthan, Jaipur.
Company is engaged in the business of supplying of biomass fuels, which includes biomass pellets and briquettes. The Company in year 2021 started the business of selling Biomass pellets and briquettes. These biomass fuels are an alternative source of energy which are basically used in commercial and industrial heating, cooking fuel, industrial burning and electricity generation, as an alternative to fossil fuels like coal, firewood, lignite, Agri-waste etc. The briquettes are majorly used for industrial purposes like running boilers etc. and pellets are used as cooking fuel or commercial purposes. The Company is currently selling these pellets and briquettes to customers engaged in the business of recycling material, textile processing, pharmaceutical, metal etc.
The main raw material used in the manufacturing of biomass fuels include Agri-waste, saw dust, farm waste etc. These raw materials are procured from the farmers and nearby sources either directly or through dealers and brokers. Apart, from the biomass manufactured by Company, they are into supplying of biomass pellets and briquettes, which are procured from different vendors who are engaged in the manufacturing of these biomass fuels.
Biomass pellet or briquettes are cylindrical and condensed form of organic material derived from various renewable sources. These pellets serve as an alternative to traditional fossil fuels and play a significant role in addressing energy and environmental challenges. These biomass fuels act as renewable energy source, reduce emissions, helps in utilization of the waste materials and are energy efficient. These Biomass pellets and briquettes are built from recycled green waste, producing less greenhouse gas emission.
The Company is proposing the Initial Public Offer of 13,92,000 fresh issue equity shares.
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T&C*
Strengths vs Risks of Shubhshree Biofuels Energy Ltd
Know the pros & cons
Strengths
Location Advantage.- Customer Centric Approach.
- Eco- friendly product.
- Experienced Promoter and Management team.
Risks
- The company has a history of net losses in past and any losses or its inability to achieve profitability may have an adverse effect on its operations.
- The biomass fuel industry is a relatively new concept and is yet to have a defined market as compared to conventional fuels, on account of which the company has to face resistance from the potential customers to switch to biomass fuel.
- The Company is engaged in the business of supplying of biomass fuels and has commenced manufacturing of pallets during last one year. The manufacturing activity may take stabilizing period and also the company does not have long term supply agreements with suppliers which may have an adverse effect on the business operations and profits of the company.
- Significant portion of its revenue is generated from few of the company's key clients. The loss of any such key clients, significant reduction in the demand for its products from such clients or deterioration in their financial condition may adversely affect its business, financial condition, result of operations and cash flows.
- The company generates almost entire of its sales from its operations in certain geographical regions especially Northern India and any adverse developments affecting its operations in these regions could have an adverse impact on its revenue and results of operations.
- Its business is subject to seasonal variations that could result in fluctuations in its results of operations.
- The company has a limited operating and financial history, which makes it difficult to evaluate its business and future operating results on the basis of its past performance.
- The company in past failed to apply for certain regulatory licenses, registrations and approvals in respect of its business operations. Failures to obtain or maintain licenses, registrations, permits and approvals may severely affect its business and results of operations.
- The company has not placed orders for the purchase of plant and machinery for which part of the funds are being raised through the Issue.
- The company does not own the Registered office, other Offices and manufacturing facility from which the company carry out its business activities. Any termination or dispute in relation to these rental agreements may have an adverse effect on its business operations and results thereof.
- Any rise in costs or a deficiency in the availability of the raw materials the company procure could impact the company's sales, profitability, and operational results in an adverse manner.
- The company has had certain inaccuracy in relation to regulatory filings and the company has made non-compliances of certain provision under applicable law.
- The company has not taken any insurance coverage to protect it against certain operating hazards and this may have a material adverse effect on its business.
- Its Promoter Group Entities are engaged in the line of business similar to the Company. There are no non-compete agreements between the Company and such entities. The company cannot assure that its Promoters will not favour the interests of other entities over its interest or that the said entities will not expand, which may increase its competition and may adversely affect business operations and financial condition of the Company.
- Inventories and trade receivables form a major part of its current assets. Failure to manage the company inventory and trade receivables could have an adverse effect on its net sales, profitability, cash flow and liquidity.
- The company has in the past entered into related party transactions and may continue to do so in the future. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on the Company's financial condition and results of operations.
- The company depends on third parties for a major portion of its transportation needs. Any disruptions may affect its operations, business and financial condition.
- Any delay or default in payment from its customers could result in the reduction of the company profits and affect its cash flows.
- The absence of entry barriers into bio-pellets or briquettes production may attract players from both organized and unorganized sectors which can escalate competition and resultant price pressure on the products.
- The Company is involved in certain legal proceedings.
- Any loss of or breakdown of its machineries, at the company manufacturing facility may have an adverse effect on business, financial condition and results of operations.
- Introduction of alternative biomass fuel products caused by changes in technology or consumer needs may affect demand for its existing product which may adversely affect the company financial results and business prospects.
- Its Promoters, Directors and Key Management Personnel have interest in the Company, other than
reimbursement of expenses incurred or remuneration.
- The company is heavily dependent on its Promoters and Key Managerial Personnel for the continued success of its business through their continuing services and strategic guidance and support.
- The company has had negative net cash flows in the past and may continue to have negative cash flows in the future.
- The Company's logo is not registered under Trade Marks Act, 1999, as on date of Draft Red Herring
Prospectus. Its may be unable to adequately protect the company's intellectual property.
- Information relating to its production capacities included in this Red Herring Prospectus is based on certain assumptions and has been subjected to rounding off, and thus its future production and capacity utilization may vary. Further, the company not be able to efficiently utilize the installed capacity due to any reason beyond its control.
- Certain documents in relation to educational qualifications and experience for certain of its Directors and Key Management Personnel are not available and reliance has been made on declarations and affidavits furnished by such Directors and Key Management Personnel for details of their profiles included in this Draft Red Herring Prospectus.
- Its Group Company has incurred losses in the past and has negative networth as on March 31, 2023.
- The company has issued Equity Shares during the last one year at a price that will be below the Issue Price.
- The unsecured loan availed by the Company from Directors may be recalled at any given point of time.
- A shortage or non-availability of electricity or power may adversely affect its manufacturing operations and have an adverse effect on the company business, results of operations and financial condition.
- Non-compliance with and changes in, safety, health and environmental laws and other applicable
regulations, may adversely affect its business, results of operations and financial condition.
- The company may not be able to effectively implement its business and growth strategies and achieve future growth.
- Its ability to pay dividends in the future will depends on its earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.
- The company may not be able to detect or prevent fraud or other misconduct committed by its employees or third parties.
- The Promoters and the Promoter Group may retain majority control of the Company after the Issue, and may have interests that are adverse to, or conflict with, the interests of other shareholders.
- If the company is unable to maintain an effective internal controls and compliance system, its business and reputation could be adversely affected.
- Any variation in the utilization of the Net Proceeds as disclosed in this Draft Red Herring Prospectus shall be subject to certain compliance requirements, including prior Shareholders' approval.
- Any Penalty or demand raised by statutory authorities in future will affect its financial position of the Company.
- The average cost of acquisition of Equity Shares by its Promoters, could be lower than the issue price.
- The company has encountered challenges in meeting the designated timelines for filing statutory returns, which may subject it to penalty under the relevant laws.
- The company has not identified any alternate source of funding and hence any failure or delay on its part to mobilize the required resources or any shortfall in the Issue proceeds may delay the implementation schedule.
- QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid and Retail Individual Investors are not permitted to withdraw their Bids after closure of the Issue.
- Rights of shareholders under Indian laws may be more limited than under the laws of other jurisdictions.
- The Objects of the Issue for which funds are being raised have not been appraised by any bank or financial institution. Any variation between the estimation and actual expenditure as estimated by the management could result in execution delays or influence its profitability adversely.
- There is no monitoring agency appointed by the Company to monitor the utilization of the Issue proceeds.
- Any future issuance of Equity Shares, or convertible securities or other equity linked securities by it and any sale of Equity Shares by its significant shareholders may dilute your shareholding and adversely affect the trading price of the Equity Shares.
- The Issue price of its Equity Shares may not be indicative of the market price of the company Equity Shares after the Issue and the market price of its Equity Shares may decline below the issue price and you may not be able to sell your Equity Shares at or above the Issue Price.
- The company has not independently verified certain data in this Draft Red Herring Prospectus.
- Its may be subject to surveillance measures, such as the Additional Surveillance Measures (ASM) and the Graded Surveillance Measures (GSM) by the Stock Exchanges which may adversely affect trading price of its Equity Shares.
Shubhshree Biofuels Energy Ltd Peer Comparison
Understand the company’s industry standing
Shubhshree Biofuels Energy Ltd
Face Value
10
Standalone / Consolidated
Standalone
Total Income Rs. Cr.
94.8832
EPS-Basis
8.6
EPS-Diluted
8.6
NAV Per Share
---
P/E-Basic EPS
13.84
P/E-Diluted EPS
---
RONW(%)
46.36
Latest NAV Period
---
Latest NAV
---
How to check the allotment status of Shubhshree Biofuels Energy Ltd IPO?
Follow the steps
Open link to the registrar using this URL (https://evault.kfintech.com/ipostatus/).
Select company from dropdown menu.
Enter details- PAN, Application number or DP client ID
Get your allotment status
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The IPO opens on 09 Sept 2024 & closes on 11 Sept 2024.
Shubhshree Biofuels Energy Ltd was incorporated as Shubhshree Bricks Private Limited' , pursuant to a Certificate of Incorporation dated April 23, 2013, issued by the RoC, Rajasthan, Jaipur. The name of Company was changed from 'Shubhshree Bricks Private Limited' to 'Shubhshree Biofuels Energy Private Limited' dated October 30, 2023. Subsequently, Company was converted from a Private Company to a Public Company, and the name was changed to 'Shubhshree Biofuels Energy Limited' vide fresh Certificate of Incorporation dated February 1, 2024 issued by the Registrar of Companies, Rajasthan, Jaipur.
Company is engaged in the business of supplying of biomass fuels, which includes biomass pellets and briquettes. The Company in year 2021 started the business of selling Biomass pellets and briquettes. These biomass fuels are an alternative source of energy which are basically used in commercial and industrial heating, cooking fuel, industrial burning and electricity generation, as an alternative to fossil fuels like coal, firewood, lignite, Agri-waste etc. The briquettes are majorly used for industrial purposes like running boilers etc. and pellets are used as cooking fuel or commercial purposes. The Company is currently selling these pellets and briquettes to customers engaged in the business of recycling material, textile processing, pharmaceutical, metal etc.
The main raw material used in the manufacturing of biomass fuels include Agri-waste, saw dust, farm waste etc. These raw materials are procured from the farmers and nearby sources either directly or through dealers and brokers. Apart, from the biomass manufactured by Company, they are into supplying of biomass pellets and briquettes, which are procured from different vendors who are engaged in the manufacturing of these biomass fuels.
Biomass pellet or briquettes are cylindrical and condensed form of organic material derived from various renewable sources. These pellets serve as an alternative to traditional fossil fuels and play a significant role in addressing energy and environmental challenges. These biomass fuels act as renewable energy source, reduce emissions, helps in utilization of the waste materials and are energy efficient. These Biomass pellets and briquettes are built from recycled green waste, producing less greenhouse gas emission.
The Company is proposing the Initial Public Offer of 13,92,000 fresh issue equity shares.
Shubhshree Biofuels Energy Ltd IPO will close on 11 Sept 2024.
- Location Advantage.
- Customer Centric Approach.
- Eco- friendly product.
- Experienced Promoter and Management team.
| S.No | Promoters Name | Pre Issue Shares | Pre Issue Percentage | Post Issue Shares | Post Issue Percentage |
|---|---|---|---|---|---|
| 1 | Anurag Agarwal | 542500 | 14.09 | 542500 | 10.35 |
| 2 | Aastha Agarwal | 542500 | 14.09 | 542500 | 10.35 |
| 3 | Sagar Agrawal | 1282750 | 33.32 | 1282750 | 24.47 |
| 4 | Upansa Srivastava Dattani | 1282750 | 33.32 | 1282750 | 24.47 |
- The company has a history of net losses in past and any losses or its inability to achieve profitability may have an adverse effect on its operations.
- The biomass fuel industry is a relatively new concept and is yet to have a defined market as compared to conventional fuels, on account of which the company has to face resistance from the potential customers to switch to biomass fuel.
- The Company is engaged in the business of supplying of biomass fuels and has commenced manufacturing of pallets during last one year. The manufacturing activity may take stabilizing period and also the company does not have long term supply agreements with suppliers which may have an adverse effect on the business operations and profits of the company.
- Significant portion of its revenue is generated from few of the company's key clients. The loss of any such key clients, significant reduction in the demand for its products from such clients or deterioration in their financial condition may adversely affect its business, financial condition, result of operations and cash flows.
- The company generates almost entire of its sales from its operations in certain geographical regions especially Northern India and any adverse developments affecting its operations in these regions could have an adverse impact on its revenue and results of operations.
- Its business is subject to seasonal variations that could result in fluctuations in its results of operations.
- The company has a limited operating and financial history, which makes it difficult to evaluate its business and future operating results on the basis of its past performance.
- The company in past failed to apply for certain regulatory licenses, registrations and approvals in respect of its business operations. Failures to obtain or maintain licenses, registrations, permits and approvals may severely affect its business and results of operations.
- The company has not placed orders for the purchase of plant and machinery for which part of the funds are being raised through the Issue.
- The company does not own the Registered office, other Offices and manufacturing facility from which the company carry out its business activities. Any termination or dispute in relation to these rental agreements may have an adverse effect on its business operations and results thereof.
- Any rise in costs or a deficiency in the availability of the raw materials the company procure could impact the company's sales, profitability, and operational results in an adverse manner.
- The company has had certain inaccuracy in relation to regulatory filings and the company has made non-compliances of certain provision under applicable law.
- The company has not taken any insurance coverage to protect it against certain operating hazards and this may have a material adverse effect on its business.
- Its Promoter Group Entities are engaged in the line of business similar to the Company. There are no non-compete agreements between the Company and such entities. The company cannot assure that its Promoters will not favour the interests of other entities over its interest or that the said entities will not expand, which may increase its competition and may adversely affect business operations and financial condition of the Company.
- Inventories and trade receivables form a major part of its current assets. Failure to manage the company inventory and trade receivables could have an adverse effect on its net sales, profitability, cash flow and liquidity.
- The company has in the past entered into related party transactions and may continue to do so in the future. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on the Company's financial condition and results of operations.
- The company depends on third parties for a major portion of its transportation needs. Any disruptions may affect its operations, business and financial condition.
- Any delay or default in payment from its customers could result in the reduction of the company profits and affect its cash flows.
- The absence of entry barriers into bio-pellets or briquettes production may attract players from both organized and unorganized sectors which can escalate competition and resultant price pressure on the products.
- The Company is involved in certain legal proceedings.
- Any loss of or breakdown of its machineries, at the company manufacturing facility may have an adverse effect on business, financial condition and results of operations.
- Introduction of alternative biomass fuel products caused by changes in technology or consumer needs may affect demand for its existing product which may adversely affect the company financial results and business prospects.
- Its Promoters, Directors and Key Management Personnel have interest in the Company, other than reimbursement of expenses incurred or remuneration.
- The company is heavily dependent on its Promoters and Key Managerial Personnel for the continued success of its business through their continuing services and strategic guidance and support.
- The company has had negative net cash flows in the past and may continue to have negative cash flows in the future.
- The Company's logo is not registered under Trade Marks Act, 1999, as on date of Draft Red Herring Prospectus. Its may be unable to adequately protect the company's intellectual property.
- Information relating to its production capacities included in this Red Herring Prospectus is based on certain assumptions and has been subjected to rounding off, and thus its future production and capacity utilization may vary. Further, the company not be able to efficiently utilize the installed capacity due to any reason beyond its control.
- Certain documents in relation to educational qualifications and experience for certain of its Directors and Key Management Personnel are not available and reliance has been made on declarations and affidavits furnished by such Directors and Key Management Personnel for details of their profiles included in this Draft Red Herring Prospectus.
- Its Group Company has incurred losses in the past and has negative networth as on March 31, 2023.
- The company has issued Equity Shares during the last one year at a price that will be below the Issue Price.
- The unsecured loan availed by the Company from Directors may be recalled at any given point of time.
- A shortage or non-availability of electricity or power may adversely affect its manufacturing operations and have an adverse effect on the company business, results of operations and financial condition.
- Non-compliance with and changes in, safety, health and environmental laws and other applicable regulations, may adversely affect its business, results of operations and financial condition.
- The company may not be able to effectively implement its business and growth strategies and achieve future growth.
- Its ability to pay dividends in the future will depends on its earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.
- The company may not be able to detect or prevent fraud or other misconduct committed by its employees or third parties.
- The Promoters and the Promoter Group may retain majority control of the Company after the Issue, and may have interests that are adverse to, or conflict with, the interests of other shareholders.
- If the company is unable to maintain an effective internal controls and compliance system, its business and reputation could be adversely affected.
- Any variation in the utilization of the Net Proceeds as disclosed in this Draft Red Herring Prospectus shall be subject to certain compliance requirements, including prior Shareholders' approval.
- Any Penalty or demand raised by statutory authorities in future will affect its financial position of the Company.
- The average cost of acquisition of Equity Shares by its Promoters, could be lower than the issue price.
- The company has encountered challenges in meeting the designated timelines for filing statutory returns, which may subject it to penalty under the relevant laws.
- The company has not identified any alternate source of funding and hence any failure or delay on its part to mobilize the required resources or any shortfall in the Issue proceeds may delay the implementation schedule.
- QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid and Retail Individual Investors are not permitted to withdraw their Bids after closure of the Issue.
- Rights of shareholders under Indian laws may be more limited than under the laws of other jurisdictions.
- The Objects of the Issue for which funds are being raised have not been appraised by any bank or financial institution. Any variation between the estimation and actual expenditure as estimated by the management could result in execution delays or influence its profitability adversely.
- There is no monitoring agency appointed by the Company to monitor the utilization of the Issue proceeds.
- Any future issuance of Equity Shares, or convertible securities or other equity linked securities by it and any sale of Equity Shares by its significant shareholders may dilute your shareholding and adversely affect the trading price of the Equity Shares.
- The Issue price of its Equity Shares may not be indicative of the market price of the company Equity Shares after the Issue and the market price of its Equity Shares may decline below the issue price and you may not be able to sell your Equity Shares at or above the Issue Price.
- The company has not independently verified certain data in this Draft Red Herring Prospectus.
- Its may be subject to surveillance measures, such as the Additional Surveillance Measures (ASM) and the Graded Surveillance Measures (GSM) by the Stock Exchanges which may adversely affect trading price of its Equity Shares.
The Issue type of Shubhshree Biofuels Energy Ltd is Book Building - SME.
The minimum application for shares of Shubhshree Biofuels Energy Ltd is 1200.
The total shares issue of Shubhshree Biofuels Energy Ltd is 1392000.
Initial public offer of upto 13,92,000 equity shares of face value of
Rs. 10/- each (the "Equity Shares") of Shubhshree Biofuels Energy Limited ("The Company" or "The Issuer" or "SBEL")) at an issue price of Rs. 119 per equity share for cash, aggregating up to Rs. 16.56 crores ("Public Issue") out of which 72,000 equity shares of face value of Rs. 10 each, at an issue price of Rs. 119 per equity share for cash, aggregating Rs. 0.86 crores will be reserved for subscription by the market maker to the issue (the "Market Maker Reservation Portion"). The public issue less market maker reservation portion i.e. issue of 13,20,000 equity shares of face value of Rs. 10 each, at an issue price of Rs. 119 per equity share for cash, aggregating upto
Rs. 15.70 crores is here in after referred to as the "Net Issue". The public issue and net issue will constitute 26.55% and 25.18 % respectively of the post-issue paid-up equity share capital of the company.