Review By on February 9, 2016
K P Energy Limited (KPEL) is a Part of KP Group. The Company provides complete solutions from concept till completion of project life-cycle of Wind Projects. Activities covered are Siting of Wind-farms, Lands & Permits acquisition, EPCC (Engineering, Procurement, Construction & Commissioning) of Wind Project Infrastructure including power transmission and Operations & Maintenance of entire Balance of Plant of a Utility Scale Wind-farm. Business model of the company is designed to bring scalability in wind sector by serving OEMs (Original Equipment Manufacturers) of Wind Turbines, IPPs (Independent Power Producers, Captive Users as well as Institutional Investment Programmes.
To part finance its 2.10 MW wind power project at Bhavnagar and raise general corpus funds, the company is coming out with a maiden public issue of 920000 equity share of Rs. 10 each via book building route. The offer price band is fixed at Rs. 60-70. Based on the lower and upper price bands, the company hopes to mobilize Rs. 5.52 crore to Rs. 6.44 crore. Issue opens for subscription on 15.02.16 and will close on 17.02.16. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Aryaman Financial Services Ltd is the lead manager for this issue. Bigshare Services Pvt Ltd is the registrar to this offer. This Issue has been graded by CRISIL Limited as CRISIL SME Fundamental Grade 3, indicating good fundamentals. After raising initial equity at par till 2013, it raised further equity at a price of Rs. 20 per share in March 2015 and also issued bonus in the ratio of 3 for 2 in April 2015. Its current paid up equity of Rs. 2.50 crore will stand enhanced to Rs. 3.42 crore post this issue. Post allotment, this shares will be listed on BSE SME.
On performance front the company has posted top/bottom line of Rs. 1.06 cr./Rs. 0.07 cr. (FY2013), Rs. 9.47 cr./Rs. 0.30 cr. (FY 2014) and Rs. 27.03 cr./Rs. 2.94 cr. (FY 2015). For first six months of the current fiscal, it has earned net profit of Rs. 1.25 crore on a turnover of Rs. 12.47 crore. If we attribute these earnings on annualized basis on fully diluted equity post this IPO, then asking price is at a P/E of around 9 against industry average of 11 and thus augurs well. However, future prospects of the company are hinged to performance of proposed wind energy project.
On merchant banker’s front, they have poor track record for their past mandates. This is the eleventh IPO from its stable.
As this issue is from the renewable energy segment that is heading for bright prospects ahead, risk savvy investors may consider parking of their funds for long term.
Review By on February 9, 2016
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
The initial public offer (IPO) of K.P.Energy Ltd. offers an early investment opportunity in K.P.Energy Ltd.. A stock market investor can buy K.P.Energy IPO shares by applying in IPO before K.P.Energy Ltd. shares get listed at the stock exchanges. An investor could invest in K.P.Energy IPO for short term listing gain or a long term.
Read the K.P.Energy IPO recommendations by the leading analyst and leading stock brokers.
K.P.Energy IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the K.P.Energy IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is K.P.Energy IPO?"
Our recommendation for K.P.Energy IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the K.P.Energy IPO.
The K.P.Energy IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit K.P.Energy IPO allotment status to check.
