Dynamic Cables IPO comprises of 5,844,000 Equity Shares of face value of Rs 10 each for cash at a fixed price of Rs 40.00 per equity share. Dynamic Cables is a manufacturer and suppliers of Cables & Conductors for private and government clients across India & abroad
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Final Subscription Figures:
| Bids Received (X Times) | |||
| NII | DII | Total | |
| Day 1 | 1.11 | 0.59 | 0.85 |
| Day 2 | 2.57 | 5.92 | 3.74 |
| Day 3 | 40.32 | 7.12 | 22.03 |
Dynamic Cables IPO Details:
| Issue Period | 04 Dec 2017 to 06 Dec 2017 |
| Issue Size (No. of Shares) | 5844000 |
| Issue Size (Rs. Crore) | 23.376 |
| Face Value | 10 |
| Issue Price | 40 |
| Market Lot | 3000 |
| Minimum Bid Quantity | 3000 |
| Listing | BSE |
| Lead Managers | HEM SECURITIES LIMITED |
| Registrar | Bigshare Services Private Limited |
About Dynamic Cables
- Dynamic Cables is engaged in manufacturing of Cables and Conductors which widely include manufacturing of Low Voltage and High Voltage Power Cables, Aerial Bunched Cables, All Aluminium Conductor (A.A.C.), All Aluminium Alloy Conductor (A.A.A.C.), Aluminium conductor steel reinforced (A.C.S.R.) Conductors and Service Drop Cables used for transmission and distribution
of Electricity. - Dynamic Cables manufacturing facilities are distributed in three units located in Jaipur.
- Company has latest machinery and equipment, In-house testing facilities and qualified engineers, which help them in maintaining quality standards as well as an efficient delivery record with appropriate after sales service.
- Besides catering to Indian market, Dynamic Cables exports its products to countries like Kenya, Tanzania, TOGO, Nigeria, Benin, Uganda, Rwanda, NEPAL, Mauritius, Afghanistan, Jordan, Dubai etc
Financials
| Rs. Million | |||||
| Particulars | Q1Fy18 | Mar 2017 | Mar 2016 | Mar 2015 | Mar 2014 |
| Net Sales | 872.6 | 2999.86 | 2678.75 | 2603.89 | 1974.12 |
| Total Income | 888.5 | 3021.46 | 2697.99 | 2621.18 | 1991.70 |
| PBIDT | 66.03 | 233.63 | 224.62 | 110.97 | 102.37 |
| PBT | 30.93 | 121.21 | 99.78 | 36.17 | 21.36 |
| PAT | 20.48 | 79.2 | 67.97 | 25.38 | 15.71 |
| PAT Margin(%) | 2.35% | 2.64% | 2.54% | 0.97% | 0.80% |
| Equity | 107.8 | 107.8 | 100 | 100 | |
| Reserves and Surplus | 305.05 | 170.46 | 102.49 | 77.43 | |
| Total Debt | 893.46 | 923.61 | 491.06 | 425.94 | |
| NAV | 40.2 | 38.3 | |||
| Net Worth | 412.85 | 270.46 | 202.49 | 177.43 | |
| RONW | 23.18 | 28.74 | 13.36 | 9.54 | |
| ROCE | 17.02 | 21.70 | 13.85 | 14.75 | |
| EPS | 1.90 | 7.35 | 6.80 | 2.54 | |
| Face value | 10 | ||||
| IPO Price | 40 | ||||
| Price / Earning | 12.84 | ||||
| Price / Book Value | 1.00 | ||||
| Post Issue Equity | 220.1 | ||||
| EPS (post Issue) | 3.60 | ||||
| PE Post Issue | 11.12 | ||||
| Cagr Sales (Fy13-17) | 14.24% | ||||
| Cagr NP (Fy13-17) | 97.55% | ||||
| Market Cap | 880.4 | Million | |||
| Market Cap/Sales | 0.29 | ||||
Objectives of theDynamic Cables IPO:
- To Meet Working Capital requirements.
- To Meet General Corporate Expenses
- To Meet Issue Expenses
Rationale for Investment
- Besides Power sector generation, Transmission, Dynamic Cables is serving sectors like – Industrial, Exports, Turnkey projects, Infrastructure works
etc. in India and abroad. - While power sector contributes 42% to its sales, 13.6% is contributed by Exports and rest comes form other sectors.
- Dynamic Cables is a “Government Recognized Export House” from the Ministry of Commerce & Industry, Government of India and are presently exporting directly and indirectly through merchant exporters to many Countries in the Asian subcontinent, Africa and Middle East.
- Company is approved by the state owned electric utilities company “POWERGRID”. Dynamic Cables is also approved With BHEL, Larson &Toubro Ltd, TATA Projects Ltd, North Western Railways, Public Works Department, Maharashtra along with all major state electricity boards in India.
- Besides Government clients, the companies products are also widely being used amongst various Indian private clients which include Gammon India, Jaguar Overseas,Mohan Energy, L&T, TATA, Bajaj, Voltas etc
- In addition to three existing plants , company is in process of installation of new plant at Reengus, Distt. Sikar, Rajasthan, India for manufacturing of new range of cables and conductors such as 66KV High Voltage cables, Railway signaling cables and Optical fiber ground wire.
Risks & Concerns
- Dependence on State Electricity boards poses risks of delayed payments
- Being BSE SME issue can face lack of liquidity.
- Net profit margins are in range of 2-3%.
Peer Comparison:
| Finolex | KEI | Cords | Dynamic | |
| Market Price | 637 | 397.95 | 137.95 | 40 |
| Net Sales | 2987.64 | 2502.98 | 323.41 | 299.99 |
| PBIDT | 587.36 | 384.78 | 35.07 | 23.36 |
| PBIDT Margin | 19.66% | 15.37% | 10.84% | 7.79% |
| PAT | 352.18 | 98.64 | 5.03 | 7.92 |
| PAT Margin | 11.79% | 3.94% | 1.56% | 2.64% |
| Equity | 124.1 | 15.56 | 12.93 | 22.01 |
| Face Value | 10 | 2 | 10 | 10 |
| Networth | 2291.39 | 473.46 | 121.3 | 41.285 |
| NAV | 184.65 | 60.86 | 93.83 | 38.3 |
| EPS | 6502.67 | 12.68 | 3.89 | 3.60 |
| PE | 0.10 | 31.39 | 35.46 | 11.12 |
| P/BV | 3.45 | 6.54 | 1.47 | 1.04 |
| Market Cap | 7905.17 | 3096.05 | 178.37 | 88.04 |
| Market Cap/ Sales | 2.65 | 1.24 | 0.55 | 0.29 |
Assessment
- On post issue equity, the issue is priced at a P/E of 11.12 which is quite reasonable when compared with its peers.
- Dynamic Cables has shown good growth in Revenue and Profits in the last three years. Its CAGR Sales stood at 14% while CAGR Net profit stood at 97%.
- Dynamic Cables IPO appears reasonably priced.
- Though there can be liquidity concerns on BSE SME Platform in medium term, Iam applying for this IPO.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. I may have vested interest in every stock I discuss and my views may be biased. Please do your own due diligence as stock market investments have high degree of inherent risk.