QVC Exports Ltd. (OEL) has carved a niche in the ferro alloys industry, dealing in a range of products like high carbon silico manganese, low carbon silico manganese, high carbon ferro manganese, and ferro silicon. The company also sources raw materials essential for steel manufacturing, such as manganese ore, chrome ore, and coke.
QVC Exports operates on a unique business model that not only supplies these raw materials to ferro alloy manufacturers but also purchases their finished products to sell them to steel manufacturers worldwide. This inward-outward strategy has allowed the company to establish a strong, reliable network of customers and suppliers, effectively serving multiple stages of the steel supply chain.
As of March 31, 2024, QVC Exports earned 82.95% of its revenue from export operations, with products shipped to markets like Taiwan, Japan, Bangladesh, Vietnam, Turkey, and more. The company also imports manganese ore and related products from renowned miners and manufacturers in Hong Kong and France. QVC’s commitment to quality is evident in its use of independent inspection agencies like Bureau Veritas and SGS to ensure that its products meet the highest standards, maintaining its reputation among both domestic and international steel manufacturers.
As of August 6, 2024, QVC Exports held domestic orders worth INR 29.59 crore and export orders totaling INR 49.41 crore. The company, with just 15 employees, is preparing to go public with its first IPO, offering 2,049,600 fresh equity shares priced at INR 86 per share. The IPO is set to open on August 21, 2024, and close on August 23, 2024, aiming to raise INR 24.07 crore. Post-IPO, QVC's paid-up capital will increase to INR 10.45 crore, with a projected market cap of INR 89.89 crore.
QVC's financial performance has shown remarkable growth, with total income rising from INR 127.83 crore in FY22 to INR 454.63 crore in FY24. However, the sharp increase in both revenue and profit in FY24 has raised some concerns about the sustainability of this growth. Despite this, the issue is aggressively priced, with a post-IPO P/E of 22.87 based on FY24 earnings.
In terms of investment strategy, QVC Exports is positioned as a dealer and trader in ferro alloys and steel manufacturing materials. While the company has demonstrated strong growth, the rapid increase in FY24 figures suggests a cautious approach. Well-informed investors may consider moderate investments for medium to long-term gains.
Currently, the grey market premium (GMP) of the stock is INR 20, which is approximately 23% of the issue price of INR 86.
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