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Here, in this article, you learn about the grey market. However, by devoting sufficient time to learning current business practices, one can significantly improve one’s chances of success. For full understanding, it’s better to spend time learning about volume based trading techniques.
Before starting the main topic, first, clear the basic concepts of terminologies written in the subject!
What is an IPO?
The conversion of a private firm into public by selling its stock to the general public is known as an initial public offering (IPO). The company can be of any version, i.e., new, developed, or fully developed. The firm agrees to list on a stock exchange and therefore evolves public.
What is Grey Market?
An unofficial market for tradable assets is known as a grey market. It is the market where people acquire or sell shares/apps before the official launch for exchanging on a stock exchange.
On the quest for upswing stories in the household consumption sector, some are spinning bullish while others are snatching a significant look at the global tags.
As the domestic market changes from unorganized to organized, some analysts believe an unlisted scrip could be one of the upcoming big success stories.
Can you guess??
Wait! Let us solve the mystery for you.
Case Study of Studds Accessories:
Studds Accessories, a helmet manufacturing company, is leading globally. It has a one-third share of the 2 wheeler helmet market. The investors who have invested in these shares marked double growth since March 2020. In this stance, the analysts declare the company can uphold its status in the coming years.
It is pertinent to mention that Studds is the only BIS-certified two-wheeler helmet to be manufactured and marketed in India. Therefore, this is a significant boost for the organization.
The owners, Divyanshu and Aditya Aggarwal of a Delhi-based investment boutique named Growfast Securities and Credit, stated that the company’s future is bright, based on excellent fundamentals and growth prospects.
Furthermore, Aditya Aggarwal reported that the company is running at full potential. It is a good sign the company can expect double-digit sales, net profit, and EPS growth. Better perimeters and bottom-line execution have resulted from backward integration of raw materials.
Additionally, the Covid-19 outbreak has turned out to be a gift in disguise for the company, as it has resulted in massive demand for face shields and other protective clothing.
He further stated that several pharmaceutical firms and hospital chains have signed partnerships with Studds. Through this partnership, they will provide protective clothing for corona warriors and healthcare workers.
Studds reported more sales in the fiscal year 2020 in contrast to the fiscal year 2019. For instance, the total sale of Rs 436.94 crore in 2020, up from Rs 397.25 crore in 2019. PAT increased to Rs 74.59 crore in Fiscal Year 2020, up from Rs 40.48 crore the year before. EPS increased from 20.58 to 37.
Reportedly, the company has a strong balance sheet, with a debt-to-equity ratio of 0.12 times, a return on equity (ROE) of 34%, and a return on capital employed of 40% for fiscal 2019-20.
Isn’t that a great fact!
Helmet sales reported an increase in the sale of the two-wheeler. According to Sandip Ginodia, CEO of Altius Investech, both rural and urban markets will contribute to the company’s success.
Hence, everything is going on a smooth track!
Personalized transportation has cultivated the preferred means of mobility in the post-Covid age. Due to this, there is an increased demand for replacing helmets every couple of years.
Studds Accessories is rapidly diversifying its portfolio. They included riding gear like gloves, goggles, and jackets, along with safety and storage gear like side luggage, rainwear, top luggage, and helmet security guard.
A rumor has been circulating in the market that Studds may go public soon, while the company itself does not ratify it.
Moreover, as per a statement of Ginodia, the firm has made twice as much its manufacturing capacity after commissioning a few new facilities in Faridabad, Haryana. However, a low-profile administration is the only interest for the stock.