Thinking Hats Entertainment Solutions Limited IPO: All You Need to Know

The Thinking Hats Entertainment Solutions Limited IPO is one of the most anticipated SME IPOs of September 2024. This company, operating in the entertainment industry, has made a name for itself through its work in event management, OTT content creation, and marketing. Here’s a complete breakdown of everything you need to know about the IPO, including financials, investment strategies, key dates, and more.

Table of Contents

1. Introduction to Thinking Hats Entertainment Solutions Limited IPO

The Thinking Hats Entertainment Solutions Limited IPO is scheduled to open on September 25, 2024, and close on September 27, 2024. The company plans to raise ₹15.09 crores through this IPO by offering 34,29,000 shares in the price band of ₹42 to ₹44 per share. Retail investors can apply for a minimum of 3,000 shares, with an investment of ₹1,32,000.

The company’s IPO has garnered attention for its role in the OTT content and event management industries, making it a unique offering in the market. Let’s dive deeper into the details of the IPO and the company’s background.

2. Company Overview: Thinking Hats Entertainment Solutions Limited

Founded in 2013, Thinking Hats Entertainment Solutions Limited has grown rapidly, providing comprehensive services in event management, corporate functions, and OTT content development. It boasts an impressive clientele, including major players such as the Tata Group, McDonald’s, and Uber.

In recent years, the company has expanded its services to cover the growing demand for OTT content across platforms like Netflix, Sony Liv, and Amazon Prime, which has further boosted its financial performance. The company’s diversified portfolio places it at a strategic advantage in the entertainment and marketing industries.

Exploring the Business Landscape of Thinking Hats Entertainment Solutions Limited

3. IPO Details: Thinking Hats Entertainment Solutions Limited

The proceeds from the Thinking Hats Entertainment Solutions IPO will be allocated towards the following:

Repayment of loans to reduce debt burden.
Funding working capital to manage day-to-day operations more effectively.
General corporate purposes for further business expansion.

This distribution of funds reflects the company’s focus on stabilizing its financial position while investing in future growth opportunities.

For those interested in the Thinking Hats IPO, here are the key details:

Issue Dates: September 25, 2024 – September 27, 2024.
Price Band: ₹42 to ₹44 per share.
Issue Size: ₹15.09 crores.
Shares Offered: 34,29,000 shares.
Lot Size: 3,000 shares for retail investors.
Retail Investor Investment: ₹1,32,000 minimum.
IPO Allocation:
QIB: 9.97%.
NII: 26.96%.
RII: 63.07%.

The funds raised from the IPO will be used primarily for loan repayment, working capital, and other corporate purposes. This IPO presents a unique opportunity for investors interested in a growing company within the entertainment and event management space.

Here’s a tabular representation of the key dates for the Thinking Hats Entertainment Solutions Limited IPO based on the information provided:

Event	Date
IPO Opening Date	September 25, 2024
IPO Closing Date	September 27, 2024
Basis of Allotment Finalization	September 30, 2024
Refunds Initiation	October 1, 2024
Credit of Shares to Demat Account	October 1, 2024
Listing Date	October 3, 2024

Here’s a tabular representation of the Thinking Hats Entertainment Solutions Limited IPO details based on the information provided:

Detail	Information
Price Band	₹42 – ₹44 per share
Market Lot Size	3,000 shares
Minimum Investment	₹132,000
Total Issue Size (Fresh Issue)	₹15.09 Crores
Face Value	₹10
Issue Type	SME IPO
Kostak Rate	Not specified in recent data
Subscription to Public	3,429,000 shares
Promoter’s Holding Pre-Issue	78.29%
Promoter’s Holding Post-Issue	Not specified
Company’s Incorporation	February 11, 2013
Business Focus	Event management, content production, experiential marketing
Book Running Lead Manager	Horizon Financial Pvt Ltd

4. Financial Performance of Thinking Hats Entertainment Solutions

When evaluating an IPO, a company’s financials provide critical insights into its performance. For Thinking Hats Entertainment, its financial trajectory is impressive. The company’s revenue for the fiscal year 2024 stood at ₹26.70 crore, marking a 20% growth from the previous year. Additionally, the net profit increased by 54% to ₹3.098 crore, showing strong profitability and business scalability.

The company’s involvement in the OTT content production space and its successful partnerships with large corporations have significantly contributed to this growth, making it an appealing option for potential investors.

Here’s a tabular representation of the financial information for Thinking Hats Entertainment Solutions Limited, restated for clarity:

Financial Metric	31 Mar 2024	31 Mar 2023	31 Mar 2022
Assets	₹2,403.22	₹1,456.81	₹641.14
Revenue	₹2,670.10	₹2,227.80	₹1,245.20
Profit After Tax (PAT)	₹309.16	₹200.79	₹37.21
Net Worth	₹1,099.86	₹573.26	₹372.47
Reserves and Surplus	₹1,012.28	₹497.01	₹296.22
Total Borrowing	₹543.46	₹413.65	₹29.22

Key Observations:

Revenue Growth: Revenue saw an increase from ₹1,245.2 lakh in FY22 to ₹2,227.8 lakh in FY23, and further to ₹2,670.1 lakh in FY24, indicating a 20% year-over-year growth from FY23 to FY24.
Profit After Tax: PAT surged from ₹37.21 lakh in FY22 to ₹200.79 lakh in FY23, and then to ₹309.16 lakh in FY24, showcasing a remarkable 54% growth from FY23 to FY24.
Asset Growth: Assets almost doubled from FY22 to FY23 and continued to grow significantly into FY24, which could reflect investments or acquisitions for growth.
Net Worth and Reserves: Both net worth and reserves saw substantial increases, reflecting retained earnings and possibly capital infusions or profit retention for business expansion.
Borrowings: The company’s borrowings have increased significantly over the years, which might be funding growth initiatives or working capital needs.

5. Thinking Hats Entertainment Solutions Limited IPO GMP and Subscription

Given today’s date is September 27, 2024, here’s an updated scenario for Thinking Hats Entertainment Solutions Limited IPO based on recent developments:

Grey Market Premium (GMP) for Today: As of today, the GMP has shown a significant interest, with the premium reportedly at over 68% against the IPO price, which translates to a GMP of approximately ₹30, suggesting the shares are trading at ₹74 apiece in the grey market.

Subscription Status as of Today (Day 3 of IPO):

Overall Subscription: The IPO has been subscribed 196.62 times by the end of the third and final day, indicating an overwhelming demand that far exceeds initial expectations.
Category-wise Subscription:
- Retail: The retail category has shown extraordinary interest, being subscribed multiple times over, reflecting the high investor confidence in the entertainment sector’s growth.
- NII and QIB: While specific figures for these categories today aren’t provided, typically, such high overall subscription rates suggest strong participation across all investor categories.

Market Sentiment Analysis:

Post-Day 1 to Day 3 Scenario: From initial reports to today, there’s been a consistent buzz on platforms like X about not just the subscription rates but also the GMP, with sentiments ranging from cautious optimism to outright enthusiasm for listing gains.
Adjusted GMP: The increase in GMP reflects not just investor confidence but possibly speculative trading based on the sector’s growth trajectory and the company’s business model evolution.

Investment Considerations:

Market Dynamics: The exceptionally high subscription rate might fuel further optimism, but there’s also a cautionary note about the sustainability of such valuations, especially in a sector known for its volatility.
Sentiment on X: Discussions on X highlight both the excitement around the listing gains, with some users suggesting potential gains ranging from 50% to 70%, and others advising caution regarding long-term stability in the entertainment sector.
Long-term vs. Short-term Gains: While short-term listing gains look promising due to the high GMP, long-term investment would hinge on Thinking Hats Entertainment’s ability to innovate, manage content costs, and expand its market share.

Given this scenario, if you’re considering investment:

Stay Updated: With such dynamic movements, real-time updates are crucial, especially towards the closing of the IPO window.
Diversification: Investing in this IPO, given its performance, might look attractive, but it’s wise to consider it within a diversified portfolio to mitigate sector-specific risks.
Fundamental Analysis: Beyond market sentiment, delve deeper into the company’s financials, its strategic pivots into OTT content, and its growth projections against the backdrop of the broader entertainment and media industry trends.

Remember, while these details reflect the current market sentiment and behaviors around Thinking Hats Entertainment Solutions IPO, always complement this information with direct checks on financial news platforms or market analysts for the most current and detailed insights.

6. Thinking Hats Entertainment Solutions Limited IPO EPS and PE Ratio

From the information available up to September 24, 2024:

EPS (Earnings Per Share):
- For FY24, Thinking Hats Entertainment Solutions Limited reported a profit after tax of ₹309.16 lakh. Given the number of shares offered in the IPO and considering the face value, we could estimate an approximate EPS if the share count remains constant post-IPO. However, for exact FY24 EPS, without the precise number of shares after the IPO, we’re looking at an approximate EPS based on the IPO size. If we calculate roughly based on the fresh issue and assume no significant change in equity shares outstanding post-IPO, the EPS could be around ₹309.16 lakh divided by 34.29 lakh shares (fresh issue) which would give us an EPS if all else was equal (which it’s not, as there would be existing shares too). But for an exact number, we’d need the total number of shares post-IPO.
PE Ratio (Price to Earnings Ratio):
- Based on the price band of ₹42 – ₹44 per share and considering the profit after tax for FY24, we can estimate the PE ratio. Given the profit after tax was ₹309.16 lakh, and assuming this as the basis for EPS calculation without considering pre-IPO shares for simplicity (which isn’t entirely accurate but gives an idea):
  - At the lower end of the price band (₹42), the PE ratio would be approximately ₹42 / (₹309.16 lakh / 34.29 lakh shares) if we only consider the fresh issue shares, which would not be accurate for real PE calculation due to existing shares. However, for an exact PE ratio, we’d need the EPS based on the total number of shares post-IPO.
  - For discussion purposes, if we were to calculate naively without real share count post-IPO, it might look like: PE = ₹42 / (₹309.16 / 34.29) ≈ 47.11, but this is a gross simplification due to the actual total shares outstanding not being provided.
From X posts, there’s mention of various PE ratios for different periods, like FY23 at 42.3× and FY24 at 35×, indicating the market’s or analysts’ expectations or calculations based on broader financial considerations or projections not detailed here.

7. How to Apply for the Thinking Hats IPO

To apply for the Thinking Hats Entertainment Solutions Limited IPO, investors can use various platforms such as Zerodha, Upstox, ICICI Direct, and more. Here’s a simple guide to applying:

Through UPI: Investors need to have a UPI ID linked to their bank account.
Through ASBA (Application Supported by Blocked Amount): This method involves applying through the investor’s bank, where the amount is blocked until allotment.

Ensure that you apply within the subscription window and have a Demat account to receive the allotted shares.

8. Investment Considerations for Thinking Hats IPO

Risk Factors

As a SME IPO, it may have lower liquidity compared to mainboard IPOs.
Broader market skepticism towards SME IPOs could impact demand.

Positives

Strong growth trajectory in revenue and profitability.
Growing presence in OTT content production and event management.

Given the company’s financial health and industry positioning, it could appeal to investors seeking growth opportunities in the entertainment and marketing sectors. However, investors must weigh these against the risks associated with SME IPOs and market volatility.

9. Conclusion

The Thinking Hats Entertainment Solutions Limited IPO offers a unique investment opportunity within the entertainment and event management industry. The company’s strong financial performance, combined with its client base and diversified business, makes it an attractive IPO for many.

However, as with all investments, it’s essential to conduct thorough research and understand the risks involved, especially with SME IPOs. With the IPO scheduled to open on September 25, 2024, now is the time to start your due diligence and decide whether this opportunity aligns with your investment strategy.

Stay updated with real-time financial news for the latest information on the Thinking Hats IPO and ensure you’re ready for the allotment and listing dates.