The Studds Accessories IPO is set to commence for investors on Thursday, October 30, and will conclude on Monday, November 3. Allotment for anchor investors is scheduled for Wednesday, October 29. The price band for the IPO ranges from ₹557 to ₹585 per share, with a minimum lot size of 25 shares, and additional purchases in multiples of 25. Currently, the grey market premium (GMP) for the IPO stands at ₹55. With the highest issue price of ₹585 and this premium, the anticipated listing price is approximately ₹640 per share, reflecting a potential increase of nearly 9.4% over the issue price.
This IPO represents an Offer for Sale (OFS), meaning the company will not receive any funds from the issue; all proceeds will be distributed to the selling shareholders. A total of 77.86 lakh shares are being offered, with 50% allocated for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and 35% for retail investors. Among the key risks outlined in the Red Herring Prospectus (RHP), a decline in the popularity of the Studds or SMK brands could lead to decreased sales, particularly since over 90% of revenue is generated from helmet sales. Additionally, a downturn in motorcycle sales could adversely impact revenue. Factory-related issues may disrupt production and profitability, while delays in obtaining necessary certifications could hinder delivery timelines.
Inefficient use of factory capacity might stifle growth opportunities. The absence of listed peers complicates performance comparisons. Quality control issues could lead to product recalls, jeopardizing customer trust. The anticipated benefits from the acquisition of Bikerz US Inc. may not materialize as expected, and the loss of business licenses or approvals could disrupt operations. Labor strikes or wage disputes may also halt production at their facilities.