Perfect Infra NSE Emerge IPO review (Apply)

Perfect Infraengineers Ltd (PIL)  is engaged in the business of Mechanical, electrical and plumbing (MEP) turnkey project contracting & engineering. It is also engaged in the manufacture of Heating, Ventilation, and Air Conditioning (HVAC) components and equipment including control panels. It has successfully completed prestigious HVAC /MEP projects all over India and abroad.

The MEP activities provided by Perfect Infraengineers include design, engineering, supply, installation and commissioning of HVAC, plumbing, firefighting and electrical systems to a wide range of industrial, commercial, hospital and tower projects. Its solution includes turnkey electro mechanical works starting from the engineering design, value engineering, construction management, erection, testing, commissioning, operation and maintenance.

To meet investment in subsidiary and long term working finance needs,  the company is coming out with a maiden IPO of 2508000 equity shares of Rs. 10 each at a fixed price of Rs. 23 per share to mobilize Rs. 5.77 crore. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Issue opens for subscription on 30.10.15 and will close on 04.11.15. Post allotment, shares will be listed on NSE Emerge platform. This issue is graded as CRISIL SME 4/5 indicating that the fundamentals of the Company are superior compared to other SMEs in India. Keynote Corporate Services Ltd and SIDBI are the lead managers to the issue and Karvy Computershare Pvt Ltd is the registrar.

On performance front, the company has posted an average EPS of Rs. 2.16 for last three fiscals. Despite continued growth in top line from FY 2011 to 2015, it suffered a severe setback in bottom line for FY 2014.  For first month of current fiscal (Aril 2015) it has earned net profit of Rs. 0.08 crore on a turnover of Rs. 1.39 crore. If we attribute this on full fiscal and fully diluted equity post IPO, the asking price is at a P/E of 18 plus. However, based on fiscal 2014 earnings, same will stand at a P/E of 11 plus. Having issued equity at par till March 2012, the company issued shares in-between at Rs. 40 in November 2002, at Rs. 20 and Rs. 21 in 2010 and 2011 and also in the range of Rs. 12.85 to Rs. 25 during March 2013 –September 2015. It has  also issued bonus shares in the ratio of 2 for 1 (June 2002), 1 for 3 (February 2005), 3 for 4 (January 2006), 1 for 2 (December 2009), 1 for 1 (January 2011), 2 for 3 (January 2013) and 1 for 3 (December 2014). Its current paid up equity capital of Rs. 5.20 crore will stand enhanced to Rs. 7.71 crore post IPO. As claimed by the company in prospectus, there is no listed peer to compare with and is having a credit of first mover in such category. According to PIL, this sector is likely to grow at a CAGR of 13 till 2020 based on market reports.