However, raw material price fluctuations could impact the company as it has not inked any agreements to insulate itself from cost escalations; it also needs to broaden its client base
Issue Details
Issue Date: 23rd September-28th September
Number of shares: 75,50,000 shares
Employees: 2,00,000 shares
Qualified Institutional Buyers (QIBs): Up to 60% (including 5% to mutual funds)
Non-institutional bidders: 10%
Retail investors: 30%
Face value: Rs10 per share
Issue price: Rs340 to Rs355 per share
Issue size: Rs268 crore
Listing: BSE & NSE
Post-listing details
Pre-issue promoters' holding: 60%
Post-issue promoter and promoter group holding: 53%
EPS (FY10): Rs25.01
P/E Ratio: 13.59 (at the lower band) and 14.19 (at the upper band)
Highest P/E in the industry: 83.2
Lowest: 7.8
Industry composite: 31.7
Business
Incorporated in 1990, New Delhi-based Tecpro Systems Ltd is engaged in material handling, provides turnkey solutions in material handling, ash handling, balance of plant (BoP) and engineering, procurement & construction (EPC) contracts. The company designs, engineers, manufactures, sells, commissions and services a range of systems and equipment for the core infrastructure related sectors like power, steel, cement and other industries. The company is promoted by Ajay Kumar Bishnoi and Amul Gabrani who are entrepreneurs with around 25 years of experience in the material handling industry.
Strengths
Concerns
Financial Snapshot
Analysts' take
Rating agency CRISIL has assigned an 'IPO Grade 4' to the issue indicating 'Above Average Fundamentals'.
Objects of the Issue
To fund working capital requirements at Rs200 crore and general corporate purposes.
Valuations
Its competitors like BGR Energy Systems Ltd, Elecon Engineering Company Ltd, McNally Bharat Engineering Company Ltd, Sunil Hitech Engineers Ltd and TRF Ltd have an EPS of Rs27.9, Rs5.6, Rs11.2, Rs18, and Rs41.90 respectively.
They have a P/E of 29.1, 16.6, 25.3, 10.9 and 19.40 respectively. The issue is priced 34 times of its face value on the lower side and 35.5 times on the higher side. The issue price looks somewhat better than its peers. The issue consists of fresh issue of 62.50 lakh shares and offer for sale of 13 lakh equity shares. The issue shall constitute 14.96% of the post-offer share capital of company.
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