Salasar Techno Engineering: IPO Review

salasar techno IPO
Salasar Techno Engineering’s
initial public offer (IPO) to raise Rs 35.86 crore will open from July 12 and close on July 17 for subscription.The IPO will consist 33.21 lakh equity shares of face value Rs 10 each fully paid for cash at a fixed price of Rs 108 per equity share aggregating Rs 35.86 crore. Salasar Techno IPO is set to be listed on both the exchanges NSE and BSE. Salasar Techno Engineering Limited is a leading provider of Steel Solutions in India with global operations spread throughout Asia and Africa

Salasar Techno IPO: Issue Details:
Issue Period 12 Jul 2017 to 17 Jul 2017
Issue Size (No. of Shares) 33,21,000
Issue Size in Rs.  Crore 35.8668
Face Value 10
Issue Price (Fixed) 108
Premium 98
Market Lot 125
Minimum Bid Quantity 125
Listing  BSE, NSE
Lead Managers Sarthi Capital Advisors (Pvt) Ltd
Registrar Bigshare Services Private Limited
About Salasar Techno Engineering:
The company was originally incorporated as ‘Salasar Petrochemicals Private Limited’ in year 2001.Thereafter the company was renamed as Salasar Techno Engineering Private Limited in 2006. Subsequently, the Company was converted into a public limited company August 02, 2016, and, the name of Company was changed to Salasar Techno Engineering Limited.

Salasar Techno Engineering addresses the needs of the customers in Infrastructure space. The company is a provider of customized steel fabrication and infrastructure solutions in the area of of Telecommunication Towers, Transmission Towers & Substation Structures and Solar Module Mounting Structures. It provides total solution by providing engineering, designing, fabrication, galvanization and deployment. The company’s products include Telecommunication Towers, Power Transmission Line Towers, Smart Lighting Poles, Monopoles, Guard Rails, Substation Structures, Solar Module Mounting Structures and Customized Galvanized & Non-galvanized steel structures.

For more details please  visit Company’s website  Click Here

Objects of the Issue:

To meet the working capital requirements of Rs 31.87 cr, general corporate purpose for Rs 2.5 Cr &to meet issue expense.

Salasar Techno IPO: Financials:

Particulars FY17 FY16 FY15 FY14
Revenue 384.29 310.01 330.11 292.37
Revenue Growth % 23.96% -6.09% 12.91%  
Operating  Profit 40.76 29.06 27.97 23.13
OPM % 10.61% 9.37% 8.47% 7.91%
Profit Before Tax 30.56 17.41 12.24 10.31
Profit  After Tax 20.74 11.04 6.27 6.26
NPM % 5.40% 3.56 1.90 2.14
Equity  Capital 9.96 4.98 4.98 4.88
Face Value 10 10 10 10
Reserves 85.88 70.52 59.48 52.04
Net Worth 95.83 75.50 64.46 56.91
Book Value 96.26 151.67 129.49 116.72
RONW (%) 21.64% 14.62% 9.73% 11.00%
EPS 20.82 22.17 12.59 12.83
PE  (IPO price 108) 5.19 4.87 8.58 8.42
Post issue equity 13.281
Eps on Post Issue Equity 15.62
PE (on Post issue Equity) 6.92

The company posted strong financial results. Its revenues increased from to Rs 384.29 in FY 2017 crore from Rs 310 crore in FY 2016, whereas the net profits also rose to Rs 20.74 crore from Rs 11.04 in the same period on consolidated basis

Salasar Techno IPO: Assessment:
  • Salasar Techno has association as manufacturing/fabrication partners for Ramboll’s  a Denmark based company and one of the leading consulting firms for Buildings, Transport, Environment, Energy, Oil & Gas and Telecom markets in the world
  • Company has completed addition of the 50000 MT Galvanizing plant, pushing its installed capacity to 1,00,00 MT per annum, and this will help it to  serve more customer needs and leverage economies of scale.
  • The company has  listed Sujana Towers Ltd., Skipper Limited R.S. Infraprojects Pvt Ltd, Kalpataru Power Transmission Ltd., Karamtara Engineering Pvt Ltd, Passive Infra Projects Pvt Ltd and Man Structurals Pvt Ltd as its competitors. Most of these companies are doing well. 
  • Salasar Techno Engineering has executed various projects for clients like Rajasthan Rajya Vidyut Prasaran Nigam Limited, NTPC Ltd,, Today Green Energy Pvt Ltd, Bharti Infratel Limited, Reliance Jio Infocomm Ltd, Zamil Infra Pvt Ltd, Indus Towers Ltd, Welspun Energy Pvt Ltd and ATC Telecom Infrastructure Pvt Ltd. ITs regular clients include  Bharti Infratel Limited, Indus Towers Ltd., Welspun Energy Pvt Ltd and ATC Telecom Infrastructure Pvt Ltd.
  • Salasar Techno Engineering order book of Rs. 576 crore as of May 31, 2017, provides it with with good revenue visibility.
  • Capacity utilization of the company has increased to 91%  in 2016-17 which provides comfort.On post Issue Equity of 13.281 crore, Salasar Techno Engineering PE works out to be 6.92 and on Pre issue Equity works out to be 5.19. This can be considered reasonable
  • Salasar Techno IPO issue size is small making allotment difficult. I intend to subscribe to the Salasar Techno IPO.

Leave a Reply