Cryogenic BSE SME IPO review (Apply)

•    The company is engaged in high-quality measurement and filtration equipments and systems for various sectors.
•    It posted growth in its top and bottom lines for the reported periods.
•    The company has bright prospects ahead as the sectors it is serving are poised for a fast forward mode.
•    Based on recent financial data, the issue appears reasonably priced.
•    Investors may park funds for medium to long term. 

ABOUT COMPANY:
Cryogenic OGS Ltd. (COL) provides high-quality measurement and filtration equipment and systems by fabrication and assembling for various sectors like oil, gas, chemicals and allied fluid industry. Focused on innovative and tailored services, for oil, gas, chemicals and allied fluid industry, it provides customized solutions to meet the specific needs of customers. COL’s team of experts works closely with clients to understand their unique requirements, developing tailored strategies that maximize efficiency and minimize costs.

Its in-house engineering and design capabilities helps it to offer diversified products and solutions to customers in each of the segments in which it operates. COL’s comprehensive solutions include design, process engineering and manufacturing including fabrication, assembly and testing facilities. The company uses Auto-CAD ELD software along with other pairing software for preparing designs of products. The company also has a well-equipped quality checking department with highly skilled manpower to carry out the required testing of all kinds relating to the machines and equipment being prepared by it for e.g., Chemical testing, Mechanical testing, non-destructive testing, Hydro test of Equipment, Pneumatic leak test with air etc. 

The Company has obtained various registrations and certifications that facilitate its business and help it to secure orders from renowned customers. The quality management system of the company is ISO 9001:2015 certified for Manufacture and supply of Chemical Dosing Skid, Additive and Blue dye Dosing Skid, Basket Strainer, Strainer cum air eliminator, air eliminator, Vapour Eliminator, Gas Metering Skid, Pressure Reduction Skid, Filtration skid, Liquid Metering Skid, Provar Tank, Additive Injection Panel and Batch Blending Vessel. As of March 31, 2025, it had 31 employees on its payroll, and also hires contract labourers as and when needed.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden IPO of 3780000 equity shares of Rs. 10 each to mobilize Rs. 17.77 cr. The issue opens for subscription on July 03, 2025, and will close on July 07, 2025. The minimum number of shares to be applied is for 6000 shares and in multiples of 3000 shares, thereafter. The company has announced a price band of Rs. 44 – Rs. 47 per share. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.47% of the post-IPO paid-up capital of the company. From the net proceeds, the company will utilize Rs. 11.50 cr. for working capital, and the rest for general corporate purposes. 

The IPO is solely lead managed by Beeline Capital Advisors Pvt. Ltd., and MUFG Intime India Pvt. Ltd., is the registrar to the issue. Beeline Group’s Spread X Securities Pvt. Ltd. is the market maker, as well as a syndicate member.

The company has issued initial equity shares at par value, and issued further equity shares at a fixed price of Rs. 37 per share in December 2011. It has issued bonus shares in the ratio of 20 for 1 in May 2024. The average cost of acquisition of shares by the promoters is Rs. 0.83, Rs. 1.13, and Rs. 16.95 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 10.50 cr. will stand enhanced to Rs. 14.28 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 67.12 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit of Rs. 22.71 cr. / Rs. 4.08 cr. (FY23), Rs. 25.67 cr. / Rs. 5.35 cr. (FY24), Rs. 33.79 cr. / Rs. 6.12 cr. (FY25). The company posted growth in its top and bottom lines for the reported periods. 

For the last three fiscals, the company has reported on a simple average EPS of Rs. 4.93 and an average RoNW of 22.23%. The issue is priced at a P/BV of 1.70 based on its NAV of Rs. 27.61 as of March 31, 2025, but its post-IPO NAV data is missing from the offer document.

If we attribute FY25 super earnings on post-IPO fully diluted equity capital, then the asking price is at a P/E of 10.96. Based on FY24 earnings, the P/E stands at 12.57. The issue relatively appears reasonably priced. 

For the reported periods, the company has posted PAT margins of 18.51% (FY23), 22.04%, (FY24), 18.61% (FY25), and RoCE margins of 28.46%, 29.06%, 28.93%, respectively for the referred periods.

According to the management, they are enjoying virtual monopoly in the segment and has creamy customers who are giving repeat orders. As of June 30, 2025, it has an order book worth Rs. 29 cr. and has submitted tenders worth Rs. 50+cr. which are likely to be in their favour being the most preferred supplier. The company is a zero-debt company and is poised to reap the benefits

DIVIDEND POLICY:
The company has not paid any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy post listing, based on its financial performance and future prospects. 

COMPARISION WITH LISTED PEERS:
As per the offer document, the company has shown Loyal Equipments, as their listed peer. It is trading at a P/E of 34.0 (as of June 30, 2025). However, they are not truly comparable on an apple-to-apple basis. 

MERCHANT BANKER’S TRACK RECORD:
This is the 62nd mandate from Beeline Capital in the last four fiscals, including the ongoing one.  From the last 13 listings, all opened with a premium ranging from 0.56% to 146.91% on the listing date.