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Zodiac Energy NSE SME IPO review (Apply)

Review By Dilip Davda on Nov 21, 2017

Zodiac Energy Ltd.(ZEL) is a Energy Solution Provider company having experience of more than two decades in majority of verticals of power generations spectrum. Their spectrums of services are including Design, supply, installation, Testing and Commissioning (EPC) and Operation and Maintenance (O&M). Thus it provides turnkey solutions from concept to commissioning of power plants. ZEL has installed solar power plants for many prominent clients like Sun-Edison India Limited, Adani Group, Torrent Power Limited, Gujarat Energy development Agency, Reserve Bank of India, Directorate of Lighthouse and Lightships Government of India (GoI), Indian Oil Corporation Limited to name a few. The company has installed more than 6,000 KW of Rooftop solar power plants till now and it envisages reaching at 10,000 KW by end of 2017-18.

To part finance its working capital and general corpus fund needs, ZEL is coming out with a maiden IPO of 1950000 equity shares of Rs. 10 each at a fixed price of Rs. 52 per share to mobilize Rs. 10.14 crore. Issue opens for subscription on 23.11.17 and will close on 27.11.17. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue constitutes 26.65% of the post issue paid up capital of the company. Issue is solely lead managed by Swastika Investmart Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. Since inception till March 2008 it issued equity shares at par and also a bonus issue in the ratio of 1 for 1 in September 2007. It raised further equity at a price of Rs. 23 per share in September 2017 and has also issued bonus in the ratio of 1 for 1 in the same month. Post issue, its current paid up equity capital of Rs. 5.37 crore will stand enhanced to Rs. 7.32 crore. Average cost of acquisition of shares by promoters ranging from Rs. 2.50 to Rs. 9.40 per share.

On performance front, ZEL has reported turnover/net profits of Rs. 9.53 cr. / Rs. 0.11 cr. (FY14), Rs. 8.70 cr. / Rs. 0.05 cr. (FY15), Rs. 9.20 cr. / Rs. 0.11 cr. (FY16) and Rs. 16.74 cr. / Rs. 0.24 cr. (FY17). For Q1 of current fiscal it has posted net profit of Rs. 0.49 crore on a turnover of Rs. 8.25 crore. Thus last 15 months working has shown robust growth which is really surprising. For last three fiscals it has reported an average EPS of Rs. 0.46 and average RoNW of 11.30%. Issue is priced at a P/BV of 2.33 on the basis of post issue NAV. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 19 plus against peers trading at a P/E ranging from 13 to 138. Thus issue appears fully priced.

On merchant banker’s front, this is the 8th mandate from its stable in past two years. All of last 7 listings have opened at a premium ranging from 4 to 20% on the offer price on the day of listing.

Conclusion: Investment may be considered for medium to long term in this power sector offer. (Subscribe).


Conclusion / Investment Strategy

Investment may be considered for medium to long term in this power sector offer. (Subscribe).

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Nov 21, 2017

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

Zodiac Energy FAQs

  1. 1. Why Zodiac Energy?

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

  2. 2. How is Zodiac Energy?

    Read the Zodiac Energy recommendations by the leading analyst and leading stock brokers.

  3. 3. Zodiac Energy what should investors do?

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

  4. 4. Is Zodiac Energy good?

    Our recommendation for Zodiac Energy is to subscribe.

  5. 5. Is Zodiac Energy worth Investing?

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

  6. 6. When will Zodiac Energy allotment status?

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

  7. 7. When will Zodiac Energy list?

    The Zodiac Energy will list on Tuesday, December 5, 2017, at NSE SME.

1 Comments

1. U. H. U. U  Nov 25, 2017 8:04:02 PM
Davda sir,
dont you think it''s better to go with websol energy , swelect energy or ujaas.
This companies have good financials & much bigger than this SME & also available at cheap valuation than this SME.
1.1. Pranav savjiyani  Nov 27, 2017 10:32:58 AM
Kitna subscribe hua hr