KP Green Engineering manufactures fabricated and hot-dip galvanized steel products and includes Lattice Towers Structures, Substation Structures, Solar Module Mounting Structures, Cable trays, Earthing strips, Beam Crash Barriers. KP Green Engineering IPO is set to raise Rs 189.50 crores. The issue is entirely a fresh issue of 131.6 lakh shares.

About KP Green Engineering:

• Incorporated in 2001, company manufactures fabricated and hot-dip galvanized steel products.
• Their diverse range of products includes Lattice Towers Structures, Substation Structures, Solar Module Mounting Structures, Cable trays, Earthing strips, Beam Crash Barriers and other infrastructure solution products
• They provide in-house fabrication and Hot Dip Galvanizing facilities enabling tailormade solutions to clients and end-to-end solutions by carrying out engineering, designing, fabrication, galvanization, and deployment.
• The company operates through manufacturing facility located at Dabhasa, Vadodara – 391440, Gujarat, spread across an area of 200,000 sq. ft., fully equipped with CNC machinery and equipment.
• Apart from above we also provide Fault Rectification Services (FRT) w.r.t. Optical Fiber Cables to various telecom operators, Job work for galvanizing and Solar Installation services as part of our service portfolio.
• Their Core business can be divided in following categories:
• Manufacturing of Fabricated and Galvanised Products
• Services:
  • Fault Rectification Services
  • Job Work for Galvanizing
  • Solar Installation services

Financials: KP Green Engineering IPO

Anchors: KP Green Engineering IPO

KP Green Engineering IPO: Salient Points

• This is the third IPO from KP Group after KP Energy raised ₹6.44 crore in 2016 and KPI Global Infrastructure Ltd raised ₹39.94 crore in 2019.
• Net proceeds from the IPO will be used by the company to finance the capital expenditure towards setting up a new manufacturing unit, expand the current product portfolio and general corporate purposes
• Clients

• The Net Proceeds are proposed to be used for purchasing capital equipment, meeting working capital needs, covering public issue expenses, and general corporate purposes.

• Segment-wise Revenue Bifurcation

• Product-wise Revenue Bifurcation

• Beam Crash Barrier is a new area they have entered and it clocked revenue of 623 Lacs.
• Solar MMS Structure revenues have been picking up well and stand at 43.69% in H1FY24.
• Peers:

• KP Green Engineering’s revenue are predominantly concentrated in Gujarat (99% in HY24).
• Company is an accredited vendor with GETCO (Gujarat Energy Transmission Corporation Limited) and MSETCL (Maharashtra State Electricity Transmission Company) for upto 400 Kw and 220 Kw, respectively.
• KP Green Engineering Limited (Formerly Known as KP Buildcon Pvt. Ltd.) is the parent company among all the existing Companies of the KP group.
• KP Green Engineering’s FY 2020-21 to FY 2022-23
  • income from ₹3,861.32 Lakhs to ₹11,420.89 Lakhs (71.98% CAGR)
  • profits showing 179% CAGR growth.
• KP Green Engineering IPO is coming at a PE ratio of 58x (fy23 earnings) and 32x (Fy24 annualized earning)
• I intend to apply in KP Green Engineering IPO subject to availability of funds. There is an element of risk Market conditions right now are quite bad for new listings.
• It may be noted that many times my expectations have proved to be wrong & I have been forced to sell or hold the stock in loss. Current market conditions call for lot of caution.
• Beeline Capital Advisors Pvt Ltd is the Lead Manager to the issue. It has a fair to good record. Past issues handled by them include Pratham EPC Projects, V R Infraspace, Rudra Gas Enterprise Limited, Fonebox Retail Limited, Konstelec Engineers, Australian Premium Solar, Indifra Limited, Benchmark Computer Solutions, Sheetal Universal Limited, Rajgor Castor Derivatives, Arvind and Company Shipping Agencies, Karnika Industries Limited, Hi-Green Carbon Limited, Kody Technolab Limited, Chavda Infra Limited, Vinsys IT Services Limited,Ahasolar Technologies, Pentagon Rubber, Remus Pharmaceuticals, Sotac Pharmaceuticals, RBM Infracon Limited, Transvoy Logistics, Dev Labtech, Viviana Power Tech, Vital Chemtech, Aristo Bio-Tech and Lifescience, Viaz Tyres, Vertexplus Technologies etc.
• GMP as per Social media is around Rs. 36. It may be noted that such rates are perhaps in thin deals and may not be even indicative. I steer clear of any deals in GMP however lucrative they may appear, nor I have any access to any grey market operator.
• SME IPO are much more risky and volatile than mainboard IPOs.
• 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. These certifications are for 3 year period and are no more valid. 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/IPO investments have high degree of inherent risk.