Studds Accessories Lists on Stock Exchanges with a Muted Debut, Trading Below IPO Price

Studds Accessories Limited, a prominent manufacturer of two-wheeler helmets and motorcycle accessories, made its stock market debut on Friday, but experienced a muted reception. On the National Stock Exchange (NSE), the shares listed at ₹565, reflecting a 3.43% discount to its Initial Public Offering (IPO) price of ₹585. The Bombay Stock Exchange (BSE) saw the stock open at ₹570. This listing valued the company at ₹2,243.14 crore.

Ahead of the listing, analysts noted that since the IPO did not involve a fresh issue of shares, future growth would hinge on operational performance and the dynamics of the two-wheeler industry. While strong subscription levels and a positive grey market premium were encouraging, investors were advised to carefully consider valuations and the Offer for Sale (OFS) structure.

The company successfully raised ₹137 crore from anchor investors prior to the IPO launch. The entirety of the public issue comprised an OFS of 77.86 lakh shares by promoters and other selling shareholders, indicating that Studds Accessories Limited itself did not receive any funds from this offering. The company operates three manufacturing facilities with a substantial annual production capacity and exports its products, including helmets under the Studds and SMK brands and various motorcycle accessories, to over 70 countries.

Financially, Studds Accessories reported a profit of ₹69.6 crore in FY25, an increase of 21.7% from the previous fiscal, on revenue that grew 10% to ₹584 crore. In the first quarter of FY25, the company posted a profit of ₹20 crore on revenue of ₹149 crore.

Impact This muted debut indicates initial investor caution regarding the company's valuation and the OFS structure. While the company has strong fundamentals and market presence, the lack of fresh capital infusion means future expansion will be funded through internal accruals or debt. The performance of Studds Accessories' stock will be closely watched by investors in the auto ancillary sector, as it reflects sentiment towards companies that primarily undergo OFS listings. The impact rating is 5/10.

Difficult Terms Initial Public Offering (IPO): The first time a private company offers its shares to the public, allowing it to raise capital and list on stock exchanges. Offer for Sale (OFS): A type of IPO where existing shareholders sell their shares to the public, and the company itself does not receive any proceeds. Anchor Investors: Institutional investors who commit to buying a significant portion of shares before the IPO opens to the public, providing stability and confidence. Grey Market Premium (GMP): The unofficial premium at which an IPO share trades in the grey market before its official listing on stock exchanges. A positive GMP suggests strong demand. NSE: National Stock Exchange of India, one of the leading stock exchanges in India. BSE: Bombay Stock Exchange, another major stock exchange in India, Asia's first stock exchange. FY25: Fiscal Year 2025, referring to the financial period from April 1, 2024, to March 31, 2025.