Bonfiglioli IPO opens with 30% GMP: Should you subscribe?
What's the story
Bonfiglioli Transmissions, a leading player in the mechanical and electromechanical power transmission space, has opened its initial public offering (IPO) for subscription today. The IPO is looking to raise ₹2,533.66 crore through an entirely offer-for-sale issue of 4.32 crore shares at a price band of ₹558-586 per share. The issue will remain open till October 19, with shares expected to list on BSE and NSE on October 23.
GMP insights
Grey market premium at 30%
The Bonfiglioli Transmissions IPO is commanding a gray market premium (GMP) of 30%, which indicates that the shares are expected to list at a higher price than the issue price.
However, it's important to note that gray market trends are unofficial and do not guarantee listing performance.
At this GMP, the estimated listing price would be ₹764 per share.
Market outlook
Fully valued at current multiples
Bonfiglioli Transmissions is valued at 47.7 times its CY26 price-to-earnings (P/E) ratio and 60.7 times its CY26 enterprise value to EBITDA (EV/EBITDA) at the upper end of the price band.
This gives it a market capitalization of ₹1,10,166 million, making the IPO appear fully valued.
Anand Rathi has assigned a "Subscribe for Long Term" rating to the IPO considering industrial modernization and automation adoption as long-term growth opportunities for Bonfiglioli Transmissions.
Company profile
Company has 3 manufacturing plants in India
Bonfiglioli Transmissions offers a range of products such as gearboxes, gear motors, electric motors, variable frequency drives, servo motors, and precision drives for robotics and automation.
The company operates in three main business segments: Industry and Automation Solutions, Off-Highway Mobility and Wind Industry. It caters to both OEMs and end-users.
As of June 30 this year, Bonfiglioli had 71 customer sales/service touchpoints across India, including three manufacturing plants.