IREDA, Signature Global, RR Kabel, Cello World, Jyoti CNC: Market cap of these newly-listed firms surpassed Rs 20,000 crore; what's next?

At least five newly-listed firms on Dalal Street have seen their market capitalisation exceed Rs 20,000 crore in the past year, benefiting from the ongoing rally in the domestic equity markets. The benchmark equity index BSE Sensex advanced nearly 23% year-on-year in July, while the broader indices BSE MidCap and BSE SmallCap gained 60% and 58%, respectively, during the period.

Starting with the top gainer on the list, shares of the Indian Renewable Energy Development Agency (IREDA) gained the most since listing. The scrip rallied 720% to Rs 262.55 on July 31, 2024, against the issue price of Rs 32. The public sector company, engaged in financing renewable sector financing, made its debut on Dalal Street on November 29, 2023. Meanwhile, the market capitalisation of IREDA surged to Rs 70,567 crore on July 31, 2024, from the listing day m-cap of Rs 16,123 crore at the time of closing.

According to ICICI Securities, IREDA has reported a strong quarter of 34% YoY and 6% QoQ growth in AUM in Q1FY25. The brokerage is bullish on IREDA with a target price of Rs 330 on the back of the government’s focus on the renewable sector.

The company reported 30% year-on-year growth in net profit at Rs 383.69 crore for the quarter ended June 30, 2024. It posted a profit of Rs 294.58 crore in the same quarter last year.

Real estate developer Signature Global witnessed a surge of 287% in its share price since listing. On July 31, 2024, the scrip traded at Rs 1,489.65, up from the issue price of Rs 385. Consequently, the company's market valuation soared to Rs 20,931 crore, compared to Rs 6,441 crore at the close on its listing date, September 27, 2023.

For the latest quarter ended June 2024, Signature Global reported a five-fold rise in net profit at Rs 41.21 crore against Rs 7.6 crore in the same quarter a year ago. According to Ambit Capital, there is an opportunity for new developers to enter the market alongside established giants (DLF, GPL). “Trends suggest a future where both established brands and new players can thrive in NCR; Signature Global, TARC and Max Estates are a few emerging ones,” the brokerage said in a report.

With a gain of 245%, Jyoti CNC Automation is next on the list. Shares of the company gained to Rs 1,143.60 on July 31, 2024, against the issue price of Rs 331. The company made its debut on the domestic stock markets on January 16, 2024. The market valuation of Jyoti CNC Automation was at Rs 26,008 crore on July 31, 2024, against Rs 9850 crore at the close on its listing date.

Incorporated in 1991, Jyoti CNC Automation is one of the world’s leading manufacturers of metal-cutting computer numerical control (CNC) machines. Its range of machines includes CNC turning centres, CNC turning-milling centres, CNC vertical machining centres, CNC horizontal machining centres (HMCs), simultaneous 3-axis CNC machining centres, simultaneous 5-axis CNC machining centres and multi-tasking machines. The company has an impressive client base from the defence sector. In the last 3 years, Jyoti CNC Automation has supplied more than 7,200 machines to over 3,000 customers across the globe.

RR Kabel and Cello World also rallied 73% and 47%, respectively, till July 31, 2024, against their issue price of Rs 1,035 and Rs 648. The market valuation of RR Kabel was at Rs 20,254 crore (Rs 13,500 crore on the listing date) and Cello World was at Rs 20,970 (Rs 16,806 crore on the listing date).

Net profit of RR Kabel, a consumer electricals player with a presence in fast-moving electrical goods (FMEG), declined 13.4% YoY to Rs 64.38 crore for the quarter ended June 2024, weighed by the rise in expenses. On the other hand, gross sales increased by 13% YoY to Rs 1,808 crore during the quarter under review.

Shreegopal Kabra, MD, RR Kabel in a regulatory filing said that RR Kabel reported its highest-ever quarterly revenue in Q1FY25, driven by strong volumes in both wires and cable domestic businesses and FMEG business, despite the challenges posed by elections and heat waves.

“The outlook remains strong with government capital expenditure and a resilient residential sector. Our FMEG segment also saw significant growth due to our strategic decisions. We continue to focus and accelerate on expanding capacity, targeting high-margin products and implementing strategic initiatives to lead us in FY25,” Kabra said.

Mirae Asset Capital Markets is positive on Cello World with a target price of Rs 1,139.

“Cello World is a household brand with a presence across categories, such as consumer houseware (FY24 contribution: 66.2%), writing instruments & stationery (16.7%) and moulded furniture & allied products (17.1%). The company has over six decades of experience in scaling up new businesses and carving out leaders among them. Cello, with a presence across diverse product categories, benefits from the growing total addressable market (TAM) of each of its categories. The overall TAM of Cello is expected to record a 13% CAGR over FY23-27 (to Rs 1.23 lakh crore by FY27 from Rs 74,300 crore in FY23),” the brokerage said in a report.