IPO narrative
- Unique CRAMS player; sole player and leader with pricing power in certain products
- R&D / Sales ratio = ~6%
- Technocrat promoters -> Lab -> Pilot scale -> Commercial scale
- Global innovators, giants as customers (e.g. Saudi Aramco, Baker Hughes, Polaroid etc.)
- Scarcity premium @ IPO (87% promoter owned on listing day)
- Day 1 post IPO: Institutions owned > 10% post IPO; Retail < 3%; Promoters > 87%
- Minimal equity dilution; Minimal float; Maximum FOMO
- Premium listing @ 21x sales, 85x EBITDA; Peak valuations @ 25x sales, 100x EV/EBITDA
- Informed seller vs ignorant buyer?
Image source: Framing Business Certainty by Sajal Kapoor
- Numbers must match the narrative
- Narrative must match the numbers
- Validate the story from both ends
- IPOs: informed seller vs ignorant buyer
- MOAT: Molecule-Market-Relationship-Regulatory**
PI Industries
