CLN Energy IPO Listing: Stock lists at 2% premium on BSE SME

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CLN Energy IPO Listing

CLN Energy IPO Listing

CLN Energy IPO Listing: Strong Market Debut with Initial Gains and Robust Investor Interest

CLN Energy, a rapidly growing player in the electric vehicle (EV) and lithium-ion battery sector, made its debut on the BSE SME platform today after successfully completing its ₹72.30 crore initial public offering (IPO).

The IPO was open for subscription between January 23 and January 26, 2025, and it received a highly positive response from investors.

The company, known for manufacturing lithium-ion batteries and various EV components, has garnered significant attention due to the accelerating growth of the electric vehicle market in India and globally.

IPO Listing and Initial Market Performance

CLN Energy’s shares were offered at an issue price of ₹250 per share under the IPO. Upon listing on the BSE SME platform today, the shares opened at ₹256, marking a modest 2.40% premium over the issue price.

This early premium offered investors a quick gain as the stock entered the market. The initial excitement was evident as the stock surged further, reaching the upper circuit limit of ₹268.80 within minutes of listing, reflecting strong demand and investor confidence.

Despite this early rally, the stock faced some profit booking by mid-day, causing it to dip slightly. The share price closed at ₹252.00 at the end of the first trading session, reflecting a modest gain of 0.82% for IPO investors.

While this marked a slight pullback from the day’s high, it still indicates a positive debut for the company, suggesting that investor sentiment remains favorable.

Strong Investor Demand and Oversubscription

CLN Energy’s IPO proved to be highly successful in terms of investor demand. The offering was oversubscribed by 5.42 times, which is considered a strong showing for an SME listing.

The IPO was broken down into three categories: Qualified Institutional Buyers (QIBs), Non-Institutional Investors (NIIs), and retail investors.

The portion reserved for QIBs was subscribed 1.07 times, while the NII portion was subscribed a remarkable 8.6 times. Retail investors, who form a crucial part of the subscription base for such offerings, subscribed 6.55 times.

This strong subscription reflects investor optimism about CLN Energy’s growth prospects, especially as the company is positioned in the fast-growing and high-demand electric vehicle sector.

The firm’s ability to attract such significant interest from institutional investors, non-institutional investors, and retail participants demonstrates broad confidence in its future potential.

Utilization of IPO Proceeds

CLN Energy plans to use the funds raised through this ₹72.30 crore IPO for various corporate purposes. A significant portion of the funds will be allocated towards the purchase of machinery and equipment, which will help the company expand its manufacturing capacity.

As the electric vehicle industry continues to grow, CLN Energy will need to scale up its production capabilities to meet increasing demand for its lithium-ion batteries and EV components.

In addition to this, a portion of the raised funds will be used to meet working capital requirements, ensuring that the company has sufficient liquidity to support its day-to-day operations.

Lastly, CLN Energy intends to use part of the funds for general corporate purposes, which will support its ongoing business activities and strategic initiatives.

About CLN Energy: Company Overview

Founded in 2019, CLN Energy is a manufacturing company focused on producing high-quality lithium-ion batteries and components for electric vehicles.

The company is involved in the production of a range of EV parts, including motors, controllers, throttles, DC-DC converters, displays, and differentials, all of which are crucial components for the efficient functioning of electric vehicles.

The company operates two manufacturing facilities: one in Noida, Uttar Pradesh, and the other in Pune, Maharashtra.

These facilities enable CLN Energy to cater to the growing demand for EV parts both within India and abroad.

With the increasing adoption of electric vehicles, the demand for high-performance lithium-ion batteries and related components is expected to grow exponentially, which positions CLN Energy well for future growth.

Financial Performance and Growth Trajectory

CLN Energy’s financial journey has been marked by steady growth. The company posted a net profit of ₹3.64 crore for the financial year 2022, a figure that fell to ₹73 lakh in FY 2023.

However, the company showed a strong recovery in FY 2024, with a net profit of ₹9.79 crore. This bounce-back indicates that the company has effectively navigated challenges and is now on a solid growth trajectory.

Over the past few years, CLN Energy has also demonstrated impressive revenue growth, with a compound annual growth rate (CAGR) of more than 4%.

In FY 2024, the company achieved a revenue of ₹132.86 crore, signaling its ability to scale its operations as demand for EV components increases.

In the first half of the current financial year 2024-25 (April to September 2024), CLN Energy reported a net profit of ₹4.64 crore and revenue of ₹75.84 crore.

This performance is promising and indicates that the company is on track to continue its positive growth trajectory.

EV Sector Potential and CLN Energy’s Role

The electric vehicle sector is one of the fastest-growing industries globally, with India playing an increasingly important role in the transition to sustainable transportation.

As government policies support the adoption of electric vehicles and consumers increasingly embrace eco-friendly alternatives, the demand for high-quality EV components is expected to surge.

CLN Energy, with its focus on lithium-ion batteries and EV parts, is well-positioned to capitalize on this demand.

Furthermore, the Indian government’s focus on clean energy and electric mobility is likely to drive further growth in the sector, as initiatives such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme continue to provide incentives for both manufacturers and consumers.

CLN Energy’s established presence in the EV supply chain, combined with its recent IPO, gives it the resources to expand its market share and take advantage of the growing opportunities in the electric vehicle space.

Future Outlook for CLN Energy

The listing of CLN Energy marks a significant milestone in the company’s journey, but it is just the beginning.

With solid backing from institutional and retail investors, the company is well-placed to expand its operations and take full advantage of the electric vehicle revolution.

As demand for lithium-ion batteries and EV components rises, CLN Energy’s ability to innovate and scale will be key to its continued success.

Investors will be closely watching the stock in the coming days and months to assess whether the company’s positive debut can translate into sustained growth in its share price.

With a strong market debut, CLN Energy is poised for a bright future in the rapidly evolving electric vehicle and clean energy industries.

In conclusion, the IPO debut of CLN Energy is a strong signal of the company’s future potential in a growing and vital sector.

With solid financials, an expanding product portfolio, and a promising market outlook, CLN Energy is well-positioned to benefit from the ongoing transition to electric vehicles, which should serve as a growth catalyst for years to come.

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