Transteel Seating Technologies IPO: A Success Story Rooted in Strategic Guidance
Transteel Seating Technologies recently made waves in the market with its successful Initial Public Offering (IPO), marking a significant milestone for the company. Led by founder and managing director Shiraz Ibrahim, the company raised a total of ₹49.98 crores through its SME IPO, which was a combination of a fresh issue of 67.84 lakh shares worth ₹47.49 crores and an offer for sale of 3.56 lakh shares worth ₹2.49 crores. The journey to this achievement had some key turning points, particularly a strategic dinner discussion that changed the course of the company’s financial strategy.
A Game-Changing Dinner Discussion in Goa
Before deciding to go public, Shiraz Ibrahim had considered raising funds through angel investors of StartupLanes. Seeking expert advice, he reached out to Dr. Shishir Gupta, founder and CEO of StartupLanes. In a pivotal meeting in Goa, Dr. Gupta hosted Shiraz for dinner at the famous Darya Deger restaurant in Old Goa. It was during this dinner that Shiraz discussed his plan to raise capital through angel investors.
However, Dr. Gupta, recognizing the potential of Transteel, suggested an alternative route. “I took him for dinner at the famous Darya Deger restaurant in Old Goa. He wanted to raise funding through angel investors; however, I suggested he go for an SME IPO. I am happy that his IPO became super successful,” Dr. Gupta shared. Shiraz followed the advice, and this decision ultimately proved to be a game-changer for Transteel.
The IPO Details
Transteel Seating Technologies IPO opened for bidding on October 30, 2023, and closed on November 1, 2023. The company set the IPO price band at ₹67 to ₹70 per share, with a minimum lot size of 2000 shares. Retail investors were required to invest a minimum of ₹140,000, while High Net-Worth Individuals (HNIs) had to apply for at least 2 lots, totaling ₹280,000.
Key IPO details include:
- IPO Date: October 30, 2023 – November 1, 2023
- Listing Date: November 6, 2023
- Face Value: ₹10 per share
- Price Band: ₹67 to ₹70 per share
- Lot Size: 2000 shares
- Total Issue Size: 7,140,000 shares (aggregating to ₹49.98 crores)
- Fresh Issue: 6,784,000 shares (aggregating to ₹47.49 crores)
- Offer for Sale: 356,000 shares (aggregating to ₹2.49 crores)
- Issue Type: Book Built Issue
- Listing At: NSE SME
The issue was highly subscribed, with a total subscription of 49.21 times by the closing date. The retail portion was subscribed 39.82 times, while the Non-Institutional Investor (NII) category saw a staggering 122.88 times subscription. The Qualified Institutional Buyer (QIB) portion was subscribed 12.15 times.
Investor Category & Shares Offered:
- Anchor Investor Shares: 1,860,000 (26.05%)
- Market Maker Shares: 714,000 (10.00%)
- QIB Shares: 1,350,000 (18.91%)
- NII (HNI) Shares: 966,000 (13.53%)
- Retail Shares: 2,250,000 (31.51%)
- Total Shares Offered: 7,140,000 (100%)
Allotment and Listing
The allotment of shares was finalized on November 5, 2023, and Transteel Seating Technologies made its stock market debut on November 6, 2023. The stock listed on the NSE SME at a premium, opening at ₹88.90, significantly higher than the issue price. The stock traded as high as ₹93.30 on the first day, indicating strong investor confidence.
Transteel Seating Technologies IPO Timeline:
- Basis of Allotment Finalization: November 5, 2023
- Initiation of Refunds: November 5, 2023
- Credit of Shares to Demat Accounts: November 5, 2023
- Listing Date: November 6, 2023
- Cut-off Time for UPI Mandate Confirmation: 5 PM on November 1, 2023
The Role of Key Stakeholders
Book Running Lead Managers:
- Gretex Corporate Services Limited
- Pantomath Capital Advisors Pvt Ltd
Registrar for the Issue:
- Bigshare Services Pvt Ltd
Market Maker:
- Gretex Share Broking
Transteel’s Financial Performance and Growth Prospects
Transteel’s financials have demonstrated significant growth. Between the financial years ending March 31, 2022, and March 31, 2023, the company’s revenue increased by 112.4%, while its profit after tax (PAT) soared by 471.64%. These numbers reflect Transteel’s strong market position and growth potential.
Financial Highlights (Restated):
- Revenue for 31st March 2023: ₹5,961.43 lakhs
- Profit After Tax (PAT) for 31st March 2023: ₹909.36 lakhs
- Assets as of 30th September 2023: ₹10,062.18 lakhs
- Net Worth (as of March 31, 2023): ₹2,444.11 lakhs
- Borrowings (as of March 31, 2023): ₹2,691.10 lakhs
Promoters and Company Vision
Founded in February 1995, Transteel is a leading player in the furniture industry, especially in the B2B segment. Its manufacturing unit is located in Yeshwanthpur, Bangalore, Karnataka. The company prides itself on delivering exceptional customer satisfaction, providing seamless website navigation, a smooth buying process, and prompt delivery.
Transteel’s promoters, Shiraz Ibrahim and Nasreen Shiraz, hold vast experience in the industry and lead a skilled management team that focuses on delivering high-quality, affordable furniture.
A Bright Future Ahead
Transteel plans to utilize the IPO proceeds to prepay certain debt facilities, purchase new manufacturing equipment, meet working capital requirements, and for general corporate purposes. The successful IPO marks the beginning of an exciting new phase for the company, allowing it to further solidify its position in the market and embark on new growth ventures.
The combination of smart strategic advice, strong financials, and market confidence has positioned Transteel Seating Technologies as a rising star in the SME sector. The successful IPO is a testament to the company’s robust management and vision for the future, offering promising returns for its investors.