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Review By Dilip Davda on July 8, 2023
• ATL is in the business of CleanTech enabling energy transition for renewable energy.
• After average performance for FY20 and 21, it posted spectacular numbers for FY22 and 23.
• Based on the super earnings of FY23, the issue is aggressively priced.
• It has strong relations with most clients and gets repeat orders.
• Well-informed investors may park funds for medium to long-term rewards.
ABOUT COMPANY:
Ahasolar Technologies Ltd. (ATL) is engaged in the business of CleanTech enabling Energy Transition through Digital Transformation and henceforth empowering stakeholders to adopt renewable energy. The company do this through multiple digital solutions and advisory in the field of renewable energy. It is serving B2B and B2C segments.
ATL is a DPIIT-recognized startup and registered vide registration no. DIPP34701. The core idea of Ahasolar is to work in the space of Climate Change, Renewable and Digital space. Its primary focus in renewable energy has been in the solar industry and to cater it has developed an AI-based intelligent Solar Digital Platform. It has developed Software as a Service (SaaS) products for solar companies to streamline the processes, design PV, do project management and monitor generation along with an integrated Marketplace to connect the demand & supply digitally. Apart from this, another SaaS product is for the governments to implement the distributed renewable programme in their services area. As of the date of filing this offer document, it had 42 employees on its payroll.
ATL client list includes GEDA, PEDA, GERMI, EESL, GUVNL, UPNEDA, L & T Power, ADB, KPMG, Deloitte, BPCL, HPCL, Coal India, Adani, Solex, GRACE etc., and gets repeat orders from them. While it has completed 20+ projects so far, it has 22+ ongoing projects.
ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with a maiden IPO of 818400 equity shares of Rs. 10 each at a fixed price of Rs. 157 per share to mobilize Rs. 12.85 cr. The issue opens for subscription on July 10, 2023, and will close on July 13, 2023. The minimum application to be made is for 800 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.55% of the post-IPO paid-up capital of the company. ATL is spending Rs. 1.02 cr. for this IPO process, and from the net proceeds, it will utilize Rs. 7.05 cr. for the development of a solar PV plant, Rs. 0.33 cr. for EV charging infrastructure, Rs. 0.09 cr. for purchase of EV, Rs. 2.40 cr. for working capital, and Rs. 1.96 cr. for general corporate purposes.
Beeline Capital Advisors Pvt. Ltd. is the sole lead manager and KFin Technologies Ltd. is the registrar of the issue. Sunflower Broking Pvt. Ltd. is the market maker for the company.
Having issued initial equity shares at par value, the company issued further equity shares in the price range of Rs. 160 - Rs. 912 between September 2022 and October 2022. It has also issued bonus shares in the ratio of 88 for 1 in September 2022 and 4 for 5 in November 2022. The average cost of acquisition of shares by the promoters is Rs. 1.46 per share.
Post-IPO, ATL's current paid-up equity capital of Rs.2.26 cr. will stand enhanced to Rs. 3.08 cr. Based on the IPO pricing, the company is looking for a market cap of Rs. 48.39 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, ATL has posted a turnover/net profit of Rs. 1.29 cr. / Rs. 0.02 cr. (FY20), Rs. 1.88 cr. / Rs. 0.08 cr. (FY21), Rs. 17.15 cr. / Rs. 0.69 cr. (FY22), and Rs. 21.05 cr. / Rs. 1.76 cr. (FY23). The quantum jump in the top and bottom lines for the last two fiscals raises eyebrows.
For the last four fiscals, ATL has reported an average EPS of Rs. 4.57 and an average RoNW of 48.69%. The issue is priced at a P/BV of 8.78 based on its NAV of Rs. 17.89 as of March 31, 2023, and at a P/BV of 2.86 based on its post-IPO NAV of Rs. 54.83 per share.
If we attribute FY23 earnings to the post-IPO fully diluted paid-up equity capital of the company, then the asking price is at a P/E of 27.45. Thus the IPO is aggressively priced discounting all near-term positives.
DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its financial performance and future prospects.
COMPARISON WITH LISTED PEERS:
As per the offer document, the company has no listed peers to compare with.
MERCHANT BANKER'S TRACK RECORD:
This is the 15th mandate from Beeline Capital in the last two fiscals (including the ongoing one). Out of the last 10 listings, 1 opened at par and the rest listed at premiums ranging from 0.39% to 62.38% on the listing date.
Review By Dilip Davda on July 8, 2023
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of Ahasolar Technologies Limited offers an early investment opportunity in Ahasolar Technologies Limited. A stock market investor can buy Ahasolar Technologies IPO shares by applying in IPO before Ahasolar Technologies Limited shares get listed at the stock exchanges. An investor could invest in Ahasolar Technologies IPO for short term listing gain or a long term.
Read the Ahasolar Technologies IPO recommendations by the leading analyst and leading stock brokers.
Ahasolar Technologies IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Ahasolar Technologies IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Ahasolar Technologies IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Ahasolar Technologies IPO.
The Ahasolar Technologies IPO allotment status will be available on or around July 18, 2023. The allotted shares will be credited in demat account by July 20, 2023. Visit Ahasolar Technologies IPO allotment status to check.
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