Review By on November 21, 2017
Zodiac Energy Ltd.(ZEL) is a Energy Solution Provider company having experience of more than two decades in majority of verticals of power generations spectrum. Their spectrums of services are including Design, supply, installation, Testing and Commissioning (EPC) and Operation and Maintenance (O&M). Thus it provides turnkey solutions from concept to commissioning of power plants. ZEL has installed solar power plants for many prominent clients like Sun-Edison India Limited, Adani Group, Torrent Power Limited, Gujarat Energy development Agency, Reserve Bank of India, Directorate of Lighthouse and Lightships Government of India (GoI), Indian Oil Corporation Limited to name a few. The company has installed more than 6,000 KW of Rooftop solar power plants till now and it envisages reaching at 10,000 KW by end of 2017-18.
To part finance its working capital and general corpus fund needs, ZEL is coming out with a maiden IPO of 1950000 equity shares of Rs. 10 each at a fixed price of Rs. 52 per share to mobilize Rs. 10.14 crore. Issue opens for subscription on 23.11.17 and will close on 27.11.17. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue constitutes 26.65% of the post issue paid up capital of the company. Issue is solely lead managed by Swastika Investmart Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. Since inception till March 2008 it issued equity shares at par and also a bonus issue in the ratio of 1 for 1 in September 2007. It raised further equity at a price of Rs. 23 per share in September 2017 and has also issued bonus in the ratio of 1 for 1 in the same month. Post issue, its current paid up equity capital of Rs. 5.37 crore will stand enhanced to Rs. 7.32 crore. Average cost of acquisition of shares by promoters ranging from Rs. 2.50 to Rs. 9.40 per share.
On performance front, ZEL has reported turnover/net profits of Rs. 9.53 cr. / Rs. 0.11 cr. (FY14), Rs. 8.70 cr. / Rs. 0.05 cr. (FY15), Rs. 9.20 cr. / Rs. 0.11 cr. (FY16) and Rs. 16.74 cr. / Rs. 0.24 cr. (FY17). For Q1 of current fiscal it has posted net profit of Rs. 0.49 crore on a turnover of Rs. 8.25 crore. Thus last 15 months working has shown robust growth which is really surprising. For last three fiscals it has reported an average EPS of Rs. 0.46 and average RoNW of 11.30%. Issue is priced at a P/BV of 2.33 on the basis of post issue NAV. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 19 plus against peers trading at a P/E ranging from 13 to 138. Thus issue appears fully priced.
On merchant banker’s front, this is the 8th mandate from its stable in past two years. All of last 7 listings have opened at a premium ranging from 4 to 20% on the offer price on the day of listing.
Conclusion: Investment may be considered for medium to long term in this power sector offer. (Subscribe).
Review By on November 21, 2017
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 Zodiac Energy Ltd. offers an early investment opportunity in Zodiac Energy Ltd.. A stock market investor can buy Zodiac Energy IPO shares by applying in IPO before Zodiac Energy Ltd. shares get listed at the stock exchanges. An investor could invest in Zodiac Energy IPO for short term listing gain or a long term.
Read the Zodiac Energy IPO recommendations by the leading analyst and leading stock brokers.
Zodiac Energy IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Zodiac Energy IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Zodiac Energy IPO?"
Our recommendation for Zodiac Energy IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Zodiac Energy IPO.
The Zodiac Energy IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Zodiac Energy IPO allotment status to check.
