IPO of the year: Venus Pipes' shares doubled investors’ money since listing in May 2022; Stock shows more 29% potential upside

Despite the primary market a sluggish performance this year, the steel pipes and tubes manufacturer – Venus Pipes and Tubes Limited has been a blockbuster IPO (initial public offer) as it doubled the investors’ money since its stock market debut earlier in May 2022.

Shares of Venus Pipes and Tubes have reported a growth of 115 and 108 per cent from Rs 326 apiece (issue price) and Rs 337 apiece (listing price), respectively, to Rs 702 apiece (today’s closing) on the exchanges as of December 26, 2022 – highest of all other 36 IPOs this year.

Venus Pipes and Tubes' initial public offer (IPO) was launched between May 11-13, 2022, with an issue size of over Rs 165 crore and a price band of Rs 310 – Rs 326 per share. The IPO was subscribed 16.31 times in three days and witnessed a tepid listing on exchanges at a 3.5 per cent premium on May 24, 2022.

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Venus Pipes and Tubes: BUY – Target: Rs 905; Upside: 29%

The Indian government recently imposed an anti-dumping duty (ADD) on imports of stainless-steel seamless tubes and pipes from China. This will help domestic producers to improve utilisation and fulfill the demand, Nuvama Institutional Equities said in its report.

The duty is likely to drive growth for Venus Pipes through a faster ramp-up of expanded capacities, mostly tripling by the fourth quarter of this fiscal; imports substitution around 20–25 per cent of industry and shift from small to large players, Nuvama Institutional Equities also said.

Given strong industry tailwinds and robust earnings growth visibility of more than 50 per cent over FY22–25E, the brokerage maintained a BUY on Venus Pipes and Tubes with a target price of Rs 905 per share and value it at 24x FY24E EPS.

Also Read: Year-Ender 2022: What led to sluggish and sombre performance of IPO market this year? Experts decode

Venus Pipes Share Price History

The stock in the last six months has zoomed around 120 per cent on the exchanges as compared to a nearly 14 per cent rise in the S&P BSE Sensex during the same period. The stock in the last one month produced almost 4.5 per cent returns against over a 3 per cent fall in the benchmark index.

Image Source: StockEdge

While in the last five sessions, the counter has mainly been subdued due to weak market sentiments as compared to a 1 per cent decline in the BSE Sensex.  

IPO Market in 2022

The IPO market reported somber in 2022 as it saw mere 36 companies launching their initial share-sale to raise over Rs 55,000 crore as compared 2021, wherein almost 63 company launched their IPOs, raising more than Rs 1.2 lakh crore – one of the highest.

Besides Venus Pipes, other IPOs that have reported stellar returns this year so far today are Adani Wilmar up 88 per cent, Veranda Learning up 72 per cent, and Rainbow Childcare up 58 per cent since its listing earlier this year.