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Times Green Energy BSE SME IPO review (Avoid)

Review By Dilip Davda on Jun 12, 2021

•    The first 'All women board of director' company goes public.
•    Though novel concept, its financial data is non-encouraging.
•    The issue is priced exorbitantly.
•    With tiny equity, it will take a longer time for migration to the mainboard.

ABOUT COMPANY:
Times Green Energy India Ltd.(TGEIL) is a women entrepreneurial venture having an all-women board of directors.

The company is deeply involved in the rural ecosystem surrounding women in and around certain villages of Telangana, Andhra Pradesh & border areas of Karnataka. It also involves local agents and traders based in the state of Telangana for selling its goods. Likewise, the Company also procures goods from local dealers and vendors via local agents based in the state of Telangana. As of Dec 31, 2020, the Company employs 13 persons on its payroll.

TGEIL is currently involved in three core business activities - namely distribution of - Agro Products; Agrochemicals (including organic bio-products) and Sanitary Napkins.

With a growing network of women among these villages, the company started helping to create awareness about women hygiene products such as Sanitary Napkins along with other organizations doing such work. Thereafter in 2018 it formally entered into Woman Hygiene & Safety Segment by launching Sanitary Napkins under the brand name - 'Monthly times'.

The Company has recently launched an application in September 2020, on the play store by name of Bharatbazaar (Kisaan to Kitchen) wherein it sells various categories of products i.e. it has more than 1,000 products in its catalogue ranging from cooking essentials such as oil, basmati rice to bakery and dairy items, snacks and branded foods, beverages and sanitary napkins etc. The Company provides delivery service in and around Hyderabad.

ISSUE DETAILS/CAPITAL HISTORY:
To part finance its plans for working capital (Rs. 0.54 cr.), purchasing and setting up of registered office (Rs. 1.19 cr.), purchase of vehicles and ERP package (Rs. 0.53 cr.), funding of Sanitary Napkin SBUs set up (Rs. 0.60 cr.) and general corpus fund (Rs. 0.82 cr.) needs, TGEIL is coming out with a maiden IPO of 664000 equity shares of Rs. 10 each at a fixed price of Rs. 61 per share to mobilize Rs. 4.05 cr. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. The issue is opening for a subscription on June 16, 2021, and will close on June 22, 2021. Post allotment, shares will be listed on BSE SME. The issue constitutes 39.90% of the post issue paid-up capital of the company. The company is spending Rs. 0.37 cr. for this IPO process.

The issue is solely lead managed by Aryaman Financial Services Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Aryaman Capital Markets Ltd. is the market maker for this IPO.

The company has issued entire equity at par so far. The average cost of acquisition of shares by the promoters is Rs. 10.00 and Rs. 42.78 per share (maybe loan conversion cost).  

Post issue TGEIL's current paid-up equity capital of Rs. 1.00 cr. will stand enhanced to Rs. 1.66 cr. Based on the issue pricing, the company is looking for a market cap of Rs. 10.15 cr.

FINANCIAL PERFORMANCE:
On the financial performance front, the company has posted turnover/net profits of Rs. 20.19 cr. / Rs. 0.08 cr. (FY18), Rs. 15.16 cr. / Rs. 0.10 cr. (FY19) and Rs. 14.15 cr. / Rs. 0.12 cr. (FY20). For the nine months period ended on December 31, 2020, of FY21, it has earned a net profit of Rs. 0.13 cr. on a turnover of Rs. 5.87 cr. Thus while its top-line marked a declining trend, surprisingly, its bottom line posted growth.

For the last three fiscals, the company has posted an average EPS of Rs. 1.67 and an average RoNW of 10.44%. The issue is priced at a P/BV of 4.23 based on its NAV of Rs. 14.43 as of December 31, 2020, and at a P/BV of 1.63 based on its post-issue NAV of Rs. 37.46.

If we annualize FY21 earnings and attribute it to fully diluted post issue equity, then the asking price is at a P/E of around 59.80. Thus the issue is exorbitantly priced.

COMPARISON WITH LISTED PEERS:
As per offer documents, the company has no listed peers to compare with.

MERCHANT BANKER'S TRACK RECORD:
This is the 27th mandate from Aryaman Financial in the last four fiscals (including the ongoing one). Out of the last 10 listings, 2 opened at discount and the rest with premiums ranging from 0.04% to 2.16% on the day of listing.


Conclusion / Investment Strategy

The financial data of the company is non-encouraging, though it has a novel concept. Considering the tiny equity level, it will take a long time to migrate to the main board. The issue pricing is exorbitant based on financial parameters. There is no harm in giving this issue a “MISS”.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Jun 12, 2021

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

Times Green Energy IPO FAQs

  1. 1. Why Times Green Energy IPO?

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

  2. 2. How is Times Green Energy IPO?

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

  3. 3. Times Green Energy IPO what should investors do?

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

  4. 4. Is Times Green Energy IPO good?

    Our recommendation for Times Green Energy IPO is to avoid.

  5. 5. Is Times Green Energy IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Times Green Energy IPO.

  6. 6. When will Times Green Energy IPO allotment status?

    The Times Green Energy IPO allotment status will be available on or around Jun 25, 2021. The allotted shares will be credited in demat account by Jun 29, 2021. Visit Times Green Energy IPO allotment status to check.

  7. 7. When will Times Green Energy IPO list?

    The Times Green Energy IPO will list on Wednesday, June 30, 2021, at BSE SME.