Kalkine has a fully transformed New Avatar.
The Offer
Company Overview
Moove Lubricants Holdings (MOOV) is a leading global provider of lubricant solutions, specializing in the formulation, manufacturing, distribution, and marketing of lubricant products across various end markets. The company has established a strong strategic alliance with ExxonMobil, leveraging its brand, research capabilities, and proprietary technologies to enhance its supply chain and marketing strategies. With a focus on optimizing costs and tailoring products to meet evolving customer needs, Moove distinguishes itself through its expertise in sourcing and deep supply chain knowledge, allowing it to deliver high-performance products at competitive prices. This customer-centric approach, combined with a culture of high performance, has driven margin expansion and strong cash returns on capital investments, positioning Moove as a preferred partner in the lubricant industry.
Key Highlights
Primary Offering:
The total number of shares available under the offers includes 6,250,000 common shares issued by the company and 18,750,000 common shares offered by the selling shareholders. If the underwriters fully exercise their over-allotment option, the total number of common shares available would increase to 22,500,000.
Use of proceeds:
Moove estimates that the net proceeds from the sale of common shares in its upcoming offering will be approximately USD 83.6 million, based on an assumed initial public offering price of USD 16.00 per share (the midpoint of the estimated price range), after accounting for underwriting discounts, commissions, and offering expenses. A USD 1.00 increase or decrease in the assumed IPO price would alter the net proceeds by approximately USD 5.9 million, while a change of 1.0 million shares offered would impact net proceeds by about USD 15.1 million. The company plans to allocate USD 55.8 million (or INR310.0 million) of these proceeds for the acquisition of DIPI Holdings S.A. and its subsidiaries, with the remainder directed toward general corporate purposes, including working capital and potential future investments. While Moove intends to use the net proceeds as outlined, it retains the flexibility to reallocate funds as necessary, dependent on various factors and unforeseen events. Until the proceeds are utilized, the company will invest them in capital preservation instruments, although there are no guarantees regarding income generation or preservation of value from such investments. It is important to note that Moove will not receive any proceeds from the sale of shares by selling shareholders.
Industry Overview
Dividend policy:
On June 12, 2024, MOOV declared a dividend of INR900 million, which was subsequently paid to its shareholders on June 21, 2024. Additionally, the company distributed dividends amounting to INR246.1 million for the fiscal year ending December 31, 2023, and INR248.9 million for the fiscal year ending December 31, 2022. MOOV has not established a formal dividend policy regarding future distributions. The company intends to continue distributing a portion of its future earnings to shareholders at the discretion of its board of directors, subject to applicable laws. Such determinations will be influenced by various factors, including financial condition, operational results, capital requirements, contractual restrictions, prevailing business conditions, and any other relevant considerations deemed pertinent by the board of directors.
Financial Highlights (Results of Operations) (Expressed in USD)
Key Management Highlights
Risk Associated (High)
Investment in the IPO of “MOOV” is exposed to a variety of risks such as:
Conclusion
Moove Lubricants Holdings is offering an IPO comprising 6.25 million shares from the company and 18.75 million from selling shareholders, potentially increasing to 22.5 million if the over-allotment option is exercised. The estimated net proceeds from the IPO, projected at approximately USD 83.6 million, will primarily fund the acquisition of DIPI Holdings S.A., with the remainder earmarked for general corporate purposes. Moove, a key player in the lubricant industry with a strategic partnership with ExxonMobil, leverages its deep supply chain expertise to deliver high-performance products. Despite reporting a decline in revenue for the first half of 2024 compared to the previous year, the company showed improved profitability metrics. However, investment risks include dependency on ExxonMobil agreements, potential manufacturing disruptions, and vulnerabilities to cybersecurity threats.
Hence, given the financial performance of the company, use of proceeds, and associated risks “Moove Lubricants Holdings (MOOV)” IPO seems “Neutral" at the IPO price.
This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.
Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.
There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.
Choosing an investment is an important decision. If you do not feel confident making a decision based on the recommendations Kalkine has made in our reports, you should consider seeking advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.
The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice. The information in this report does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products. Our reports contain general recommendations to invest in securities and other financial products.
Kalkine is not responsible for, and does not guarantee, the performance of the investments mentioned in this report This report may contain information on past performance of particular investments. Past performance is not an indicator of future performance. Hypothetical returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only and may not actually be available to investors. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services..
Please also read our Terms & Conditions and Financial Services Guide for further information. Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this report or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website including entities covered in this Report.