L. T. Elevators BSE SME IPO review

•    The company is engaged in the business of manufacturing and supplying various types of elevators. It operates on B2B model of business.
•    It is also in the business of smart parking with multi-level parking solutions.
•    The company posted growth in its top and bottom lines for the reported periods.
•    Boosted profits for FY25 raise eyebrows and concern over its sustainability.
•    Based on its recent financial data, the IPO appears aggressively priced.
•    Well-informed investors may park moderate funds for medium term. 

ABOUT COMPANY:
L. T. Elevator Ltd. (LTEL) provides quality Elevator system solutions with focus on superior service, engineering and technical solutions. It offers end to end solution starting from elevator manufacturing, installation, commissioning and servicing under annual maintenance contract. The company is solution provider offering EPC (engineering, procurement and construction) and O&M (operations and maintenance) services to customers. LTEL operates with “Customer First Philosophy”. It offers a product line with the most innovative modular design and advanced engineering and commitment to provide 24 x 7 service back-up. Its products are designed with emphasis on the energy efficiency and the safety aspect of transporting people. It generally provides quality warranty period of 12 months from the date of commissioning of products.

The need for quality vertical transportation system is the need of the time. The demand has risen many folds and is rising at an accelerated pace. Therefore, the Company has a clear focus on achieving and sustaining leadership position for all round growth. The company incorporates proven logistics expertise and latest innovative designs in vertical transportation system. The Company has an integrated production line well-equipped with technical know-how and supported by latest and modern machineries and infrastructure. It optimizes and customizes operations for maximum efficiency and overall cost savings, improved customer service and ensure risk mitigation. It has in- house testing lab for quality checks under strict supervision of qualified personnel. 

The company also integrate professional management with sophisticated technology for enhanced performance and trade expertise combined with the proven ability to implement effective solutions with the deep proven experience in key industries to serve customers’ best needs. Its vertical transportation system is preferred by residential complexes, shopping malls and commercial buildings. Its customers range from public sector entities including railways, private corporates as well as standalone projects for individuals. The Company has presence in eastern part of India in automated vertical transportation system. It is also undertaking major projects in Silchar and Imphal smart cities. The Company has a manufacturing facility and warehouse is located in the state of West Bengal at Village Chakchata, P.O. Rajpur, P.S. Maheshtala, South 24 Parganas -700141, West Bengal. 

The Company also maintains distribution and sales offices in Bhubaneshwar, Delhi, Patna and Guwahati. Its manufacturing facility is having production capacity of 800 Units of elevators per annum. The manufacturing plant is equipped with Modern Equipment, ensures Quality Control, follows Sustainable Practices and is an Innovation Hub. Its manufacturing units consists of two separate lines for design, manufacturing and assembling of vertical transportation system and R&D facility. It uses the latest equipment’s installed to design, manufacture and assemble vertical transportation system from raw materials processing, preparation of sub-assembling, component fitment, testing, inspection and quality control. To ensure that it supplies quality products which meet the applicable standards and safety, it has set up a Research and Development facility (“R&D facility”), which consists of quality assurance and quality control teams who check and conduct various tests in ‘in-house laboratory’ on the raw materials and products at various stages starting from receiving of raw materials to the finished products manufactured.

Its in-house R&D facility complemented by quality assurance and quality control department has enabled it to expand business in domestic market. The vertical transportation system manufactured by it has been used by residential complexes, shopping malls and commercial buildings. Its customers range from public sector entities including railways, private corporates as well as standalone projects for individuals. Its quality control and quality assurance team carry out various technical and manual tests to ensure they do not suffer rejections, thereby generating value for it. The company has a diversified marketing network that serves as a robust channel for the promotion and sale of products. 

The Company has acquired 100% stake in Park Smart Solutions Limited on December 30, 2024, which became a subsidiary of the Company. Currently, its subsidiary is engaged in business of execution of turn-key Multi Level Car Parking Solutions including Design, Engineering, Supply, Installation & Commissioning (I&C) and Operation and Maintenance of automatic Multi-level Car Parking System. This system is preferred by residential complexes, shopping malls and commercial buildings etc. The Company has presence in Kolkata in automated car-parking business. As a parking solutions provider, Park Smart Solutions Limited is offering engineering, procurement and construction (“EPC”) services, and operations and maintenance (“O&M”) services to customers. It is providing various types of parking systems namely; Stack Parking, Puzzle Parking and Aisle Parking System; giving customers a variety of parking options suitable to their needs.

Its Subsidiary provides high quality professional solutions, design and engineering services to customers. Park Smart provides technical expertise in the most efficient and cost-effective way, helping to ensure the highest degree of reliability and availability of the project. Having achieved certain degree of expertise after successfully executing various projects, it has an extremely experienced and diverse set of professionally trained and qualified engineers having versed ability in tackling and providing solutions to customers and capability to handle all requirements.

As of August 27, 2025, it had an order book of Rs. 11.37 cr. of L. T. Elevator Limited. It offers multi-level Car Parking System / Automated Parking System through subsidiary company, Park Smart Solutions Limited where it had an order book of Rs. 10.70 cr. as of August 27, 2025. The company has a B2B Business Model, and it currently designs and manufactures elevators. The elevators are broadly classified into segments like 1. Elevators, 2. Manual elevators, 3. Semi-Automatic elevators. In addition, it also offers Multi-level Car Parking System/Automated Parking System through subsidiary. Its elevators are basically used as - • Goods Elevators • Passenger Elevators • Home (Single Phase) Elevators • Hospital Elevators. As of March 31, 2025, it had 357 employees on its payroll (including its subsidiary).

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its book building route maiden IPO of 5048000 equity shares to mobilize Rs. 39.37 cr. (at the upper cap). The company has announced a price band of Rs. 76 – Rs. 78 per share of Rs. 10 each. The IPO opens for subscription on September 12, 2025, and will close on September 16, 2025. The minimum application to be made is for 3200 shares and in multiple of 1600 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.34% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 20.00 cr. for working capital, Rs. 8.00 cr. for investment in subsidiary Park Smart Solutions Ltd., and the rest for general corporate purposes.

The IPO is solely lead managed by Horizon Management Pvt. Ltd., while Cameo Corporate Services Ltd. is the registrar to the issue. Rainbow Securities Pvt. Ltd., is the market makers. Horizon Management is also a syndicate member.

The company has issued initial equity shares at par, and issued/converted further equity shares in the price range of Rs. 20.00 – Rs. 106.57 per share between March 2012, and August 2025. It has also issued bonus shares in the ratio of 60 for 1 in June 2022, 1 for 1 in July 2024. The average cost of acquisition of shares by the promoters is Rs. 1.60, Rs. 19.28, and Rs. 63.05 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 14.12 cr. will stand enhanced to Rs. 19.16 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 149.47 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted total Income/Net Profit of Rs. 34.73 cr. / Rs. 1.25 cr. (FY23), Rs. 40.64 cr. / Rs. 3.17 cr. (FY24), and Rs. 56.74 cr. / Rs. 8.94 cr. (FY25). Surge in bottom lines from FY25 raise eyebrows and concern over its sustainability, as it is operating in a highly competitive and fragmented segment. 

For the last three fiscals, the company has reported an average EPS of Rs. 5.62, and an average RoNW of 22.43%. The issue is priced at a P/BV of 2.35 based on its NAV of Rs. 33.24 as of March 31, 2025, but its post-IPO NAV data is missing from IPO documents.

If we attribute its FY25 super earnings on post-IPO expanded equity base, then the asking price is at a P/E of 16.70, and based on its FY24 earnings, the P/E stands at 49.37. Thus, based on its recent financial data, the issue appears aggressively priced.

The company has posted PAT margins of 3.73% (FY23), 7.53% (FY24), 15.82% (FY25), and RoCE Margins of 29.38%, 45.97%, 30.50%, respectively for the referred periods. 

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

COMPARISON WITH LISTED PEERS:
As per offer document, the company has shown Aaron Ind., as its listed peers. It is currently trading at a P/E of around XX (as of September XX, 2025). However, they are not truly comparable on an apple-to-apple basis. This compare appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORDS:
This is the 20th mandate from Horizon Management in the last two fiscals (including the ongoing one). Out of last 19 listings, 5 opened at discount, 5 at par, and the rest with premium ranging from 3.08% to 141.23% on the date of listing.