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• PIL has pioneered the HVAC segment and enjoys a virtual monopoly now.
• It has marquee clients as its customers and has repeat orders.
• Recent financial data indicates the likely trends going forward.
• Suntrac Solar has partnered with PIL for technology as well as a small equity holder.
• Well-informed investors may park funds for medium to long-term rewards.
ABOUT COMPANY:
Perfect Infraengineers Ltd. (PIL) initially started its business of air conditioner repair, sales & services and has subsequently diversified as an engineering, procurement and installation ("EPI") contractor, providing turnkey jobs of Heating Ventilation and Air Conditioning (HVAC) and also manufacturing of electrical panels.
As an MEP contractor, PIL primarily focuses on the supply, installation, testing and commissioning of HVAC units and also after-sales services such as, under warranty service and annual maintenance contracts. The company also generates income from renting air conditioners to various organizations such as multinational corporations, corporate houses, etc.
As of the date of this Letter of Offer PIL served 850 customers in the MEP vertical and 35 customers in renting business. Further, it entered into an exclusive licensing agreement with Suntrac Solar Manufacturing LLC dated June 2017 to manufacture and sell in India the hybrid thermal solar ("HTS") panels and related proprietary products. Since 2017, it has successfully introduced innovative HTS panels in India and has since sold 350 units representing 4000 tonnages in the domestic and export market among 60 diversified sectoral customers.
Its key domestic customers include government and semi-government organizations, public sector undertakings, local municipalities, and private and public companies. Since, PIL's diversification into manufacturing and assembly of HTS panels, it has ceased to manufacture electrical panels. As of the date of this Letter of Offer, the company has an installed capacity to manufacture and assemble 4,000 units per annum on a double-shift basis.
In the last 2 years, PIL has made 25+ dealers/partners pan India and has onboarded clients such as Adani, ICICI Bank, Honda, P&G, Dana, Standard Chartered Bank, Siemens, Mahindra, Hero, NTPC, REC, IOCL, AIIMS, IISER, and the Government of Maharashtra, Gujarat, Chhattisgarh, Madhya Pradesh, Rajasthan many more. PIL is set to Change the Way India Cools. With over 300 installations pan India, the company is at an inflexion point in its goal to greenify the HVAC market in India, with virtually NO COMPETITION in the space. As of March 31, 2023, it had 19 employees on its payroll, and hires contract labourers as and when needed.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 6432000 equity shares of Rs. 10 each at a fixed price of Rs. 18 per share to mobilize Rs. 11.58 cr. The issue opens for subscription on August 14, 2023, and will close on August 24, 2023. The company is offering RI in the ratio of 58 for 100 shares to eligible stakeholders as of the record date of August 01, 2023. The company is asking for Rs. 7 per share (including a premium of Rs. 4 per share) on the application and the balance by way of one or more calls from time to time. Thus it has also opted for an investor-friendly gesture of calling partial money on its RI. PIL is spending Rs. 0.45 cr. for this RI process and from the net proceedings, it will utilize Rs. 1.44 cr. for repayment/prepayment of unsecured loans from the promoters and promoters group, Rs. 7.69 cr. for working capital, and Rs. 2.00 cr. for general corporate purposes.
The issue is self-managed by the company itself and KFin Technologies Ltd. is the registrar of the issue.
Post-RI, PIL's current paid-up equity capital of Rs. 11.06 cr. will stand enhanced to Rs. 17.50 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 31.49 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a turnover/net profit - (loss) of Rs. 3.56 cr. / Rs. - (0.17) cr. (FY21), Rs. 4.66 cr. / Rs. - (1.89) cr. (FY22), and Rs. 7.23 cr. / Rs. 0.60 cr. (FY23). Thus the company has turned the corner in FY 23 and is confident of maintaining the trends going forward.
DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy post listings of RI shares based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON NSE WEBSITE DATA: SCRIP CODE: PERFECT (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 20.35 on July 31, 2023, and opened on an ex-right basis at Rs. 19.20 on August 01, 2023. Since then, it has marked a high/low of Rs. 23.50 / Rs. 19.20. The scrip last closed at Rs. 21.80 as of August 09, 2023. For the last 52 weeks it has posted a high/low of Rs. 35.15 / Rs. 12.70.
The promoters' holding has been constant at 33.80% for the last three quarters ended on June 30, 2023. The counter is well-managed above the RI price to tempt investors.
Review By Dilip Davda on August 9, 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 Perfect Infraengineers Rights Issue 2023 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered Rights Issue Analysts tells you if Perfect Infraengineers Rights Issue 2023 worth investing. The Perfect Infraengineers Rights Issue 2023 Note sets the Rights Issue expectations in systematic way which tells you if Perfect Infraengineers Rights Issue 2023 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Perfect Infraengineers Rights Issue 2023 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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