Sucheta Dalal :Zero QIBs for Tarapur Transformers IPO
Sucheta Dalal

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Zero QIBs for Tarapur Transformers IPO  

April 27, 2010

 Tarapur Transformers Ltd, which opened for subscription yesterday, has received zero bids from the qualified institutional buyer (QIB) category while the retail investor category was subscribed just 0.79 times as on 27 April 2010.


The non-institutional investor quota was subscribed 4.17 times (53.20 lakh bids from the reserved quota of 12.75 lakh shares).


Tarapur Transformers Ltd is into manufacturing, rehabilitation, up-gradation, and refurbishment of transformers. It manufactures transformers up to 220 kilovolts (KV) and has an installed manufacturing capacity of 1,839.40 megavolt ampere (MVA) & repairing capability of 1,800MVA per annum.


The company posted a net profit of Rs2.15 crore for the year ended March 2009 compared to Rs1.51 crore in FY08 with a total income of Rs24.01 crore and Rs10.68 crore respectively. The earnings per share (EPS) for the year ended 31 March 2009 stand at Rs2.16. At a floor price of Rs65, its price to earnings (PE) ratio is 30.09 for the same period.


The company has taken loans to the tune of Rs18.81 crore payable to various banks which constitute 88.42% of net worth of the company as on 31 December 2009. The company reported negative cash flows to the tune of Rs7.47 lakh in FY05, Rs2.09 lakh in FY06 and Rs124.97 lakh in FY08. In FY09, its cash flow was positive at Rs9.68 lakh.


The issue opened on 26 April 2010 and closes on 28 April 2010. The company plans to raise Rs55.25 crore-Rs63.75 crore by issuing 85 lakh shares with a price band of Rs65-Rs75 per share.

The IPO money will be utilised for expansion and modernisation of its Pali unit, to finance incremental working capital, acquisition of business, marketing and corporate-branding expenses.

Ratings agency CRISIL has assigned an ‘IPO Grade 1’ to the issue. Comfort Securities Pvt Ltd is the lead book-running manager.

Market watchdog SEBI has issued a letter to the promoter company Bilpower Ltd to opt for a consent order by paying an amount of Rs1.75 lakh for violation of Regulations 6 (2) and 6(4) for fiscal 1997 and Regulation 8 (3) for fiscals 1998, 1999, 2000, 2001 and 2002 with relation to the SEBI (SAST) Regulations, 1997. — Ravi Samalad

-- Sucheta Dalal