Power & Instrumentation NSE SME IPO review (May apply)

Review By Dilip Davda on Apr 6, 2018

Power & Instrumentation (Gujarat) Ltd. (P&I) is a contracting firm founded in 1983 to provide complete EPC solutions for electrical requirements and manufactured electronic boards, electrical panels & controls panel. Currently it is engaged in providing a wide range of contracting based services in the field for Electrical, Mechanical and Instrumentation Engineering with complete turnkey solutions from concept to commissioning which includes Design, procurement, installation, testing & commissioning and maintenance of the system. Thus P&I is the one-stop solution provider and is preferred by major clients for repeated orders. Its client list includes Voltas, Vodafone, Ford, LIC, Bajaj Electricals etc. It has been certified by the prestigious ISO 9001-2000.

To part finance its working capital and general corpus fund needs, P&I is coming out with a maiden IPO of 1864000 equity shares of Rs. 10 each at a fixed price of Rs.33 to mobilize Rs. 6.15 crore Issue opens for subscription on 11.04.18 and will close on 13.04.18. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge.  Issue is solely lead managed by Navigant Corporate Advisors Ltd. and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.46% of the post issue paid up capital of the company. Having raised initial equity at par it raised further equity in the price range of Rs. 100 and Rs. 125 in March 2012 and February 2018 respectively. It has also issued bonus shares in the ratio of 4 shares for every 1 share held in February 2018. Average cost of acquisition of shares by the promoters is Rs. 1.84 and Rs. 2.38 per share. Post issue, P&I’s current paid up capital of Rs. 5.18 crore will stand enhanced to Rs. 7.04 crore.

On performance front, P&I has posted turnover/net profits of Rs. 36.33 cr. / Rs. 0.95 cr. (FY14), Rs. 45.47 cr. / Rs. 1.07 cr. (FY15), Rs. 51.66 cr. / Rs. 1.22 cr. (FY16) and Rs. 60.73 cr. / Rs. 1.57 cr. (FY17). For first nine months of the current fiscals, it has earned net profit of Rs. 1.41 cr. on a turnover of Rs. 48.56 cr. Thus it has shown slow and steady progress in top and bottom lines. For last three fiscals it has posted an average EPS of Rs. 2.71 and an average RoNW of 12.40%. Issue is priced at a P/BV of 1.42 based on its NAV of Rs. 23.32 as on 31.03.17 and at a P/BV of 1.15 based on post issue NAV of Rs. 28.66. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 12 plus. As per offer documents, it is considering HEC Infra, Prerna Infra and MEP Infra as its listed peers which is a bit surprising. They are trading at a P/E of around 9, 6 and 22 respectively as on 06.04.18 closings.

On merchant banker’s front, this is the 10th mandate in last three fiscals. Out of last 9 listings 3 opened at a discount, 1 at par and 5 at a premium ranging from 5% to 20% on the day of listing.


Conclusion / Investment Strategy

Considering the business model, track record and reasonable pricing, investors may consider investment for long term.

Review By Dilip Davda on Apr 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. 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

Power Instrumentation Gujarat IPO FAQs

  1. 1. Why Power Instrumentation Gujarat IPO?

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

  2. 2. How is Power Instrumentation Gujarat IPO?

    Read the Power Instrumentation Gujarat IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Power Instrumentation Gujarat IPO what should investors do?

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

  4. 4. Is Power Instrumentation Gujarat IPO good?

    Our recommendation for Power Instrumentation Gujarat IPO is to subscribe for long term.

  5. 5. Is Power Instrumentation Gujarat IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Power Instrumentation Gujarat IPO.

  6. 6. When will Power Instrumentation Gujarat IPO allotment status?

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

  7. 7. When will Power Instrumentation Gujarat IPO list?

    The Power Instrumentation Gujarat IPO will list on Monday, April 23, 2018, at NSE SME.








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