Tunwal E-Motors stock performance

Tunwal E-Motors Shares Surge 8.5% on Debut, Opening at ₹64 on NSE SME

Tunwal E-Motors, an emerging player in the electric vehicle (EV) two-wheeler market, made a positive debut on the NSE SME today. The company’s share price opened at ₹64, representing an 8.5% premium over its issue price of ₹59. This strong opening reflects investor confidence in Tunwal E-Motors’ growth potential and market position.

Background

The subscription period for the Tunwal E-Motors IPO began on Monday, July 15, and closed on Thursday, July 18. The IPO, priced at ₹59 per share with a face value of ₹2, saw substantial interest from investors, achieving a subscription status of 12.31 times on the last bidding date. The minimum bid was set at 2000 shares, with bids accepted in multiples thereof.

Tunwal E-Motors‘ Market Position

Tunwal E-Motors is dedicated to driving innovation in the EV two-wheeler manufacturing process. Over the years, the company has expanded its reach to 19 states across India, with a network of over 225 dealers and more than 23 models, including seven versions of two-wheelers. The company has demonstrated impressive growth, achieving a compound annual growth rate (CAGR) of 346% in revenue.

The company was founded by Jhumarmal Pannaram Tunwal, who has prior experience in the electric vehicle sector through Tunwal Electrionics, a private corporation focused on making and marketing electric vehicles.

Financial Performance

In the fiscal year 2024, Tunwal E-Motors reported sales of ₹10,460.07 lakhs, an EBITDA of ₹1,783.15 lakhs, and a PAT of ₹1,181.17 lakhs. The company’s listed peers include Wardwizard Innovations & Mobility Ltd (with a P/E of 117.96) and TVS Motors Ltd (with a P/E of 66.33).

IPO Details

The Tunwal E-Motors IPO comprised a fresh issue of equity shares worth ₹81.72 crore and an Offer For Sale (OFS) of 5,750,000 equity shares valued at ₹33.93 crore by existing shareholders. This brings the total public offering to ₹115.64 crore.

The company plans to utilize the net proceeds from the offering to meet its working capital requirements, fund research and development, pursue inorganic expansion, and cover general corporate expenses.

Grey Market Premium (GMP)

The grey market premium (GMP) for Tunwal E-Motors IPO stood at +5, indicating that the shares were trading at a ₹5 premium in the grey market, according to investorgain.com. Given the upper end of the IPO price band and the current GMP, the expected listing price for Tunwal E-Motors shares was ₹64, which is approximately 8.47% higher than the IPO price of ₹59. The grey market premium signifies investors’ willingness to pay more than the issue price, reflecting positive sentiment towards the stock.

Positives:

Strong Market Debut: The share price of Tunwal E-Motors opening with an 8.5% premium on the NSE SME is a strong indicator of positive market sentiment and investor confidence. A successful debut often boosts the company’s visibility and credibility in the financial markets.
Positive Investor Interest: The premium opening suggests strong demand and interest from investors, which can lead to higher trading volumes and increased liquidity for the stock. This initial enthusiasm can be a good sign for future performance.
Growth Potential: As an electric vehicle (EV) company, Tunwal E-Motors is positioned in a rapidly growing and high-potential industry. The positive debut reflects optimism about the company’s future prospects in the EV sector, which is seeing increasing adoption and investment.
Enhanced Capital Raising: The successful IPO and strong debut provide Tunwal E-Motors with additional capital for growth and expansion. This can support their R&D, production capabilities, and market penetration strategies.
Increased Visibility: A successful market debut enhances the company’s visibility and can attract potential customers, partners, and additional investors. This increased attention can be beneficial for building brand recognition and strategic opportunities.

Negatives:

Market Volatility: While the initial premium is positive, it does not guarantee long-term stability. The stock may experience volatility, and early gains could be subject to fluctuations based on market conditions and investor sentiment.
Competitive Pressure: The EV market is highly competitive, with numerous established players and new entrants. Tunwal E-Motors will need to continuously innovate and differentiate itself to maintain investor confidence and achieve sustained growth.
Operational Risks: As a relatively new company in the public market, Tunwal E-Motors may face operational challenges, including scaling production, managing supply chains, and meeting regulatory requirements. These factors can impact their financial performance and stock price stability.
Short-Term Speculation: A high initial premium might attract short-term speculators rather than long-term investors. If the stock is driven more by speculative trading rather than fundamental value, it could lead to price volatility and potential corrections.
Economic Conditions: Broader economic conditions, including interest rates, inflation, and geopolitical factors, can affect investor sentiment and the stock market. Adverse economic conditions may impact Tunwal E-Motors’ stock performance and overall market perception.

Overall, while the positive debut of Tunwal E-Motors’ share price is a promising start, the company must navigate various challenges and focus on long-term strategies to sustain growth and investor confidence.

Conclusion

Tunwal E-Motors’ successful debut on the NSE SME, with an 8.5% premium over the issue price, underscores the company’s strong market position and growth prospects in the EV two-wheeler sector. With robust financial performance and ambitious plans for expansion, Tunwal E-Motors is well-positioned to capitalize on the growing demand for electric vehicles in India.

FAQs

What is the issue price of Tunwal E-Motors IPO?
The issue price of the Tunwal E-Motors IPO is ₹59 per share.
How did the Tunwal E-Motors IPO perform on its debut?
Tunwal E-Motors’ share price opened at ₹64 on the NSE SME, which is 8.5% higher than the issue price of ₹59.
What was the subscription status for the Tunwal E-Motors IPO?
The Tunwal E-Motors IPO was subscribed 12.31 times on the last bidding date.
What are the primary uses of the funds raised through the IPO?
The net proceeds from the IPO will be used to meet working capital requirements, fund research and development, pursue inorganic expansion, and cover general corporate expenses.
What is the grey market premium (GMP) for the Tunwal E-Motors IPO?
The grey market premium (GMP) for Tunwal E-Motors IPO is +5, indicating that the shares were trading at a ₹5 premium in the grey market.
What are Tunwal E-Motors’ financial highlights for FY24?
For fiscal year 2024, Tunwal E-Motors reported sales of ₹10,460.07 lakhs, EBITDA of ₹1,783.15 lakhs, and PAT of ₹1,181.17 lakhs.
What are some of Tunwal E-Motors’ key competitors?
Listed peers include Wardwizard Innovations & Mobility Ltd and TVS Motors Ltd.
Who are the promoters of Tunwal E-Motors?
The promoters include Jhumarmal Pannaram Tunwal and other stakeholders involved in the company’s growth and development.