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Review By Dilip Davda on September 17, 2023
• TSL is providing consultancy on environmental related issues with many aspects under one-roof.
• It has marked growth in its top and bottom lines for the reported periods.
• Based on super earnings for FY23, the issue appears fully priced.
• Investors may consider investment for medium to long term rewards.
ABOUT COMPANY:
Techknowgreen Solutions Ltd. (TSL) was incorporated on January 02, 2023, till then it was a partnership firm. TSL is an environmental consulting company with 20+ years of experience, headquartered in Pune, India. Its key offerings include Consulting - Regulatory | Sustainability, Technology - Execution | Info Tech and Research - Policy | Engineering. The company claims to be one of the first companies in India providing environmental IT solutions through cutting-edge software applications and compliance solutions.
The company has diverse experience in handling complex projects across various industries like infrastructure, chemical, automobile, healthcare, manufacturing, real estate and national/state governments. Its client base includes government, semi government organization, MNCs, large companies, mid-size companies and MSMEs. As of the date of filing this offer document, it had 74 employees on its payroll.
With variety of services and solutions, the company is dominating the place and expanding its horizons. Currenty it has operations in 13 states and that will be expanded to other states in coming years.
ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with a maiden IPO of 1944000 equity shares of Rs. 10 each at a fixed price of Rs. 86 per share to mobilize Rs. 16.72 cr. The issue opens for subscription on September 18, 2023, and will close on September 21, 2023. The minimum application to be made is for 1600 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.33% of the post-IPO paid-up equity capital of the company. TSL is spending Rs. 3.85 cr. for this IPO process, and from the net proceeds, it will utilize Rs. 1.38 cr. for R & D initiatives, Rs. 2.00 cr. for investment in office premises, Rs. 0.99 cr. for refurbishing the new office, Rs. 1.77 cr. for expansion of its execution and support service team, Rs. 2.85 cr. for repayment of Bank facilities, and Rs. 3.88 cr. for general corporate purposes. Around 23.03% expenses for IPO process indicates fully structured model of IPO.
Indorient Financial Services Ltd. is the sole lead manager and Bigshare Services Pvt. Ltd. is the registrar of the issue. Alacrity Securities Ltd. is the market maker for the company.
The company converted initial equity capital at par value and issued further equity shares at a fixed price of Rs. 73 per share in July 2023. The average cost of acquisition of shares by the promoters is Rs. 9.58 per share.
Post-IPO, TSL's current paid-up equity capital of Rs. 5.44 cr. will stand enhanced to Rs. 7.38 cr. Based on the IPO pricing, the company is looking for a market cap of Rs. 63.49 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit of Rs. 7.85 cr. / Rs. 0.37 cr. (FY21), Rs. 9.99 cr. / Rs. 1.08 cr. (FY22), and Rs. 14.86 cr. / Rs. 4.51 cr. (FY23). FY23 performance is the result of its offering mix changes where the company has expanded its consultancy revenues and reduced servicing. Such trends will continue in coming years.
For the last three years, TSL has reported an average EPS of Rs. 5.26, and an average RoNW of 47.84%. The issue is priced at a P/BV of 6.92 based on its NAV of Rs. 12.43 as of March 31, 2023, and at a P/BV of 2.75 based on its post-IPO NAV of Rs. 31.23 per share.
If we attribute super earnings for FY23 to post-IPO fully diluted paid-up equity capital of the company, then the issue is at a P/E of around 14.08, making it fully priced issue. The management is confident of maintaining the trends of FY23 going forward.
DIVIDEND POLICY:
The company has not paid any dividends so far. 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 3rd mandate from Indorient in the last four fiscals (including the ongoing one). Out of the last 2 listings, 1 got listed at discount and the 1 with a premium of 5.86% of the date of listing. Thus it has an average track record.
Review By Dilip Davda on September 17, 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 Techknowgreen Solutions Limited offers an early investment opportunity in Techknowgreen Solutions Limited. A stock market investor can buy Techknowgreen Solutions IPO shares by applying in IPO before Techknowgreen Solutions Limited shares get listed at the stock exchanges. An investor could invest in Techknowgreen Solutions IPO for short term listing gain or a long term.
Read the Techknowgreen Solutions IPO recommendations by the leading analyst and leading stock brokers.
Techknowgreen Solutions IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Techknowgreen Solutions IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Techknowgreen Solutions IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Techknowgreen Solutions IPO.
The Techknowgreen Solutions IPO allotment status will be available on or around September 26, 2023. The allotted shares will be credited in demat account by September 28, 2023. Visit Techknowgreen Solutions IPO allotment status to check.
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