Fabtech Technologies Cleanrooms Limited manufactures pre-engineered and pre-fabricated modular panels and doors for building cleanrooms in the pharmaceutical, healthcare, and biotech sectors. Fabtech Technologies IPO plans to raise Rs 27.74 crores. The issue is entirely a fresh issue of 32.64 lakh shares.

About: Fabtech Technologies

• They are engaged in the business of manufacturing and providing design-to-validation solutions of pre- engineered and pre-fabricated modular panels and doors for building cleanrooms for pharmaceutical, healthcare & biotech sectors.
• Their cleanroom solutions, which are tailor made as per customers’ designs and global regulatory standards, comprises of wall panels, view panels, doors, risers, ceiling panels, covings, heat ventilation air conditioning (“HVAC”) system, epoxy flooring and electrification works.
• They provide a comprehensive service which includes initial design to validation, encompassing engineering, manufacturing, quality assurance, timely delivery, installation, commissioning, and validation and certification.
• Their manufacturing facility is located at Umbergaon, Valsad, Gujarat with a total area of about 70,000 sq. ft. Plant is well equipped with a complete range of high performing machinery to manufacture cleanroom partitions
• Promoters of Company are Aasif Ahsan Khan, Aarif Ahsan Khan, Hemant Mohan Anavkar and Manisha Hemant Anavkar

Financials: Fabtech Technologies IPO

Anchors: Fabtech Technologies IPO

Fabtech Technologies IPO: Salient Points

• The Indian cleanroom technologies market is witnessing robust growth, valued at USD 277.4 Million in 2023 and projected to reach USD 484.2 Million by 2030, with a CAGR of 8.3% from 2023 to 2030.
• The end users of the Indian Cleanroom Technologies market include Industries such as Pharmaceutical, Semiconductor and Electronic, Biotechnology, Foods and Beverage, Hospital and Healthcare, and others (including Automotive, Plastic, Optical, etc). The factors driving market growth include expanding industries, stringent regulations, increased R&D investments, and the COVID-19 pandemic’s emphasis on clean environments in healthcare
• Thus it is strengthening its position both through backward acquisitions as well as forward integration.
• Use of Net proceeds:

• They cater to the customers who are mainly operating in pharmaceuticals, healthcare and biotech sectors. Their customers include large pharmaceutical and healthcare companies such as Unichem Laboratories Ltd, Glenmark, Desano Pharmaceuticals Private Limited Apitoria Pharma Pvt Ltd (a 100% subsidiary of Aurobindo Pharma Ltd), Hamdard Laboratories (India), amongst others.

• They through one of their subsidiaries, Altair Partition Systems LLP (“Altair”), are engaged in the business of manufacturing modular panels of economical grade. The manufacturing facility of Altair is located at Murbad, Thane with a total area of about 25,000 sq. ft. which is taken on lease.
• They have acquired, in aggregate 26% equity share capital of Advantek Air Systems Private Limited (“Advantek”), which is engaged in the business of manufacturing of Air Handling Units, a critical component essential for the optimal operation of cleanrooms.
• As part of their strategy, they have recently invested in Kelvin Air Conditioning and Ventilation Systems Private Limited (“Kelvin”) by subscription to Compulsory Convertible Preference Shares which shall represent 33.33% shareholding in Kelvin upon its conversion. Kelvin is an integrator for critical HVAC applications catering to a wide spectrum of industries and businesses.
• Peers: None
• Company made Private Placement @71.67 in May 16, 2024.
• Proven track record of over 2000 successfully completed projects nationwide, 
• They are working at 67% capacity utilisation.
• Company has been in this business for 25 years and started with offering clean room solutions to Pharma and moved to other industries. Now company thinks that it can grow much faster with current demand for clean rooms.
• The upcoming investments in semiconductors, data Centre, ,microprocessor are likely to result in more bigger orders for the company.
• PE FY25 (annualized) 10x ; PE Fy24: 18.1x
• I intend to apply in Fabtech Technologies IPO. Company is doing both backward integration and forward integration allowing it to increase it order ticket size. Company may see a fast growth onwards fueled by large size clean room demand for industries like semiconductors, micro precision components, Operation theaters and Data centers.
• GMP as reported on social media is around Rs. 75 (88.%).
• Lead Manager Vivro has an excellent track record.
• SME IPOs are quite volatile and new retail investors need to exercise considerable caution.
• This post is exploratory and educational purposes only. Please do your own diligence before investing in SME IPOs like this.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.