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K P Energy BSE SME IPO review (Apply)

Review By Dilip Davda on Feb 9, 2016

K P Energy Limited (KPEL) is a Part of KP Group. The  Company provides complete solutions from concept till completion of project life-cycle of Wind Projects. Activities covered are Siting of Wind-farms, Lands & Permits acquisition, EPCC (Engineering, Procurement, Construction & Commissioning) of Wind Project Infrastructure including power transmission and Operations & Maintenance of entire Balance of Plant of a Utility Scale Wind-farm. Business model of the company is designed to bring scalability in wind sector by serving OEMs (Original Equipment Manufacturers) of Wind Turbines, IPPs (Independent Power Producers, Captive Users as well as Institutional Investment Programmes.
         
To part finance its 2.10 MW wind power project at Bhavnagar and raise general corpus funds, the company is coming out with a maiden public issue of 920000 equity share of Rs. 10 each via book building route. The offer price band is fixed at Rs. 60-70. Based on the lower and upper price bands, the company hopes to mobilize Rs. 5.52 crore to Rs. 6.44 crore. Issue opens for subscription on 15.02.16 and will close on 17.02.16. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Aryaman Financial Services Ltd is the lead manager for this issue. Bigshare Services Pvt Ltd is the registrar to this offer. This Issue has been graded by CRISIL Limited as CRISIL SME Fundamental Grade 3, indicating good fundamentals. After raising initial equity at par till 2013, it raised further equity at a price of Rs. 20 per share in March 2015 and also issued bonus in the ratio of 3 for 2 in April 2015. Its current paid up equity of Rs. 2.50 crore will stand enhanced to Rs. 3.42 crore post this issue. Post allotment, this shares will be listed on BSE SME.

On performance front the company has posted top/bottom line of Rs. 1.06 cr./Rs. 0.07 cr. (FY2013), Rs. 9.47 cr./Rs. 0.30 cr. (FY 2014) and Rs. 27.03 cr./Rs. 2.94 cr. (FY 2015). For first six months of the current fiscal, it has earned net profit of Rs. 1.25 crore on a turnover of Rs. 12.47 crore. If we attribute these earnings on annualized basis on fully diluted equity post this IPO, then asking price is at a P/E of around 9 against industry average of 11 and thus augurs well. However, future prospects of the company are hinged to performance of proposed wind energy project.

On merchant banker’s front, they have poor track record for their past mandates. This is the eleventh IPO from its stable.


Conclusion / Investment Strategy

As this issue is from the renewable energy segment that is heading for bright prospects ahead, risk savvy investors may consider parking of their funds for long term.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Feb 9, 2016

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. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the past, SME IPOs drew the attention of investors across the board. 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 own risk. The above information is based on information available as on date coupled with market perceptions. The Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


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.

Email: dilip_davda@rediffmail.com

KP Energy IPO FAQs

  1. 1. Why KP Energy IPO?

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

  2. 2. How is KP Energy IPO?

    Read the KP Energy IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. KP Energy IPO what should investors do?

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

  4. 4. Is KP Energy IPO good?

    Our recommendation for KP Energy IPO is to subscribe.

  5. 5. Is KP Energy IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the KP Energy IPO.

  6. 6. When will KP Energy IPO allotment status?

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

  7. 7. When will KP Energy IPO list?

    The KP Energy IPO will list on Thursday, February 25, 2016, at BSE SME.