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Innovators Facades BSE SME IPO review (May apply)

Review By Dilip Davda on May 6, 2018

Innovators Facades Systems Ltd. (IFSL) is engaged in designing, engineering, fabrication and installation of façade systems with total solutions as per the customer’s requirements. It has developed its brand image with over 18 years of history. IFSL specialize in technically demanding facades. Its manufacturing facility is at Wada – Maharashtra and is executing end to end fabrication of its products from designing of facades to dispatching. Company’s product basket ranges from glazing curtain walls, high end doors & windows, skylights, canopies, louver, stone cladding, metal cladding, roofing and others. It offers facades which are resistant against UV rays, acidic rain, dust, noise etc. It has executed orders in various states i.e. Haryana, Karnataka, Tamil Nadu, UP and Maharashtra. It has five branch offices across India. It has executed over 279 projects so far covering residential building, commercial complexes, IT Parks, Airports, Retail and Pharma projects etc. It has served clients like Hiranandani, Relcon Infra, L & T, Grauer & Weil and others.

To part finance up gradation and modernization of existing facility, working capital and general corpus fund needs, IFSL is coming out with a maiden IPO of 5660800 equity shares of Rs. 10 each via book building route with a price band of Rs. 71- Rs. 72 per share to mobilize Rs. 40.19 cr. – Rs. 40.76 cr. (based on lower and upper price bands). Issue opens for subscription on 14.05.18 and will close on 16.05.18. Minimum application is to be made for 1600 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. Issue constitutes 30 % of post issue paid up capital of the company.  Having issued initial equity at par, it raised further equity in the price range of Rs. 20 to Rs. 72 (including 1532258 shares issued under private placement at Rs. 62 in the month of March 2018 to Pantomath group and Vijay Kedia). It has also issued bonus shares in the ratio of 1.86 for 1 share held in July 2005. Average cost of acquisition of shares by the promoters is Rs. 12.72 and Rs. 37.08 per share. Post issue, its current paid up equity capital of Rs. 13.21 cr. will stand enhanced to Rs. 18.87 cr.

On performance front, IFSL has (on a consolidated basis) posted turnover/net profits of Rs. 83.75 cr. / Rs. 2.69 cr. (FY14), Rs. 92.05 cr. / Rs. 3.14 cr. (FY15), Rs. 94.39 cr. / Rs. 1.66 cr. (FY16) and Rs. 102.36 cr. / Rs. 1.82 cr. (FY17). For first nine months of FY18 it has earned net profit of Rs. 5.75 cr. on a turnover of Rs. 126.30 cr. which is really surprising. It suffered set back in bottom lines for FY16 and FY17 despite higher top lines. Issue is priced at a P/BV of 1.13 on the basis of its NAV of Rs. 63.64 as on 31.12.17. If we annualize superb performance in pre-IPO year and attribute it on fully diluted equity post issue, asking price is at a P/E of around 18 plus. It has no listed peers to compare with. It has posted an average EPS of Rs. 2.13 for last three fiscals and an average RoNW of 3.41%. Thus issue appears aggressively priced.

On merchant banker’s front, this is 71st mandate from its stable in last four fiscals. Out of last 10 listings, all have opened with a premium ranging from 1.6% to 20% on debut day.

Conclusion / Investment Strategy

Although company posted rising trends for top lines for last five fiscals, sudden drop in bottom lines for FY16 and FY17 and spectacular rise for first nine months of FY18 raises concern on sustainability. It is aggressively priced offer based on its performance so far. Investors may consider investment at their own risk.

Review By Dilip Davda on May 6, 2018

Review Author

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

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: ).

Innovators Facade Systems IPO FAQs

  1. 1. Why Innovators Facade Systems IPO?

    The initial public offer (IPO) of Innovators Facade Systems Limited offers an early investment opportunity in Innovators Facade Systems Limited. A stock market investor can buy Innovators Facade Systems IPO shares by applying in IPO before Innovators Facade Systems Limited shares get listed at the stock exchanges. An investor could invest in Innovators Facade Systems IPO for short term listing gain or a long term.

  2. 2. How is Innovators Facade Systems IPO?

    Read the Innovators Facade Systems IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Innovators Facade Systems IPO what should investors do?

    Innovators Facade Systems IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Innovators Facade Systems IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is Innovators Facade Systems IPO good?

    Our recommendation for Innovators Facade Systems IPO is to subscribe for long term.

  5. 5. Is Innovators Facade Systems IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Innovators Facade Systems IPO.

  6. 6. When will Innovators Facade Systems IPO allotment status?

    The Innovators Facade Systems IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Innovators Facade Systems IPO allotment status to check.

  7. 7. When will Innovators Facade Systems IPO list?

    The Innovators Facade Systems IPO will list on Thursday, May 24, 2018, at BSE SME.