Taylormade Renewables BSE SME IPO review (May apply)

Taylormade Renewables Ltd. (TRL) is primarily engaged in providing renewable energy solutions. Its  specialization is in manufacturing of Solar Parabolic Concentrating Systems for steam generation used in steam cooking and other industrial application, direct or in-direct heating, including solar air-conditioning, and solar space heating, solar drying, solar waste water evaporation and many more applications requiring thermal energy. Company uses parabolic static focus and moving focus technology that concentrate solar radiation by automatically tracking the sun and using the thermal energy. The advantage of using this technology is, it is risk free, safe, and indigenous and this system can be run by any person without using much skill. TRL is also the manufacturer of Solar Dish Cooker, Solar Box Cooker, Solar Dryer, Biomass cook stoves and biomass gasifiers, air source heat pumps, solar thermic fluid cooking system, evacuated tube collectors with and without CPC reflector. It is an ISO 9001-2008 certified Company which offers systems of high quality and reliability that intends to provide solutions to the customers for their various thermal energy needs at a reasonable cost.

To part finance its working capital and general corpus fund needs, TRL is coming out with a maiden IPO of 3240000 equity shares of Rs. 10 each at a fixed price of Rs. 35 per share to mobilize Rs. 11.34 crore. Issue opens for subscription on 22.03.17 and will close on 27.03.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment shares will be listed on BSE SME. Issue is solely lead managed by Guiness Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 32.98% of the post issue paid up capital of the company.  Having issued initial equity at par, it raised further equity in the price range of Rs. 11.50 to Rs. 35 per share. It has also issued bonus shares in the ratio of 0.37 to 1 (October 2017) and 2 for 1 (January 2018). Average cost of acquisition of shares by the promoters is Rs. 7.73, Rs. 11.27 and Rs. 11.52 per share. Post issue, its current paid up equity capital of Rs. 6.58 will stand enhanced to Rs. 9.82 cr.

On performance front, TRL has ported turnover/net profits of Rs. 2.45 cr. / Rs. 0.03 cr. (FY14), Rs. 8.41 cr. / Rs. 0.03 cr. (FY15), Rs. 12.11 cr. / Rs. 0.07 cr. (FY16) and Rs. 18.19 cr. / Rs. 0.45 cr. (FY17). For first nine months of the current fiscal, it has earned net profit of Rs. 1.29 cr. on a turnover of Rs.18.97 cr. For all these fiscals while top line has shown remarkable growth, bottom line remained static and under pressure till FY15. For last three fiscals it has posted an average EPS of Rs.4.17 and an average RoNW of 26.51%. Issue is priced at a P/BV of 1.03 on the basis of its NAV of Rs. 34.10 as on 31.12.17 and at a P/BV of 1.83 on the basis of its post issue NAV of Rs. 19.17. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 20.It has no listed peers to compare with.

On merchant banker’s front, this is the 26th mandate from its stable in last three fiscals. Out of last 10 listings, 1 opened at discount to offer price, 1 at par and the rest eight with a premium ranging from 2.6% to 25% on the day of listing.