Indian Energy Exchange Ltd IPO....... Should you apply????
Hello
friends,
This is the
second IPO of October and so far all the IPOs are having an awesome run at the
markets. This actually reminds me of the situations in 2004 to 2007 when IPOs
were riding on a power horse. However many IPOs that came out then lost huge
market value and today are trading in pennys. As I see today those situations
are surfacing. However let’s hope that the tides have changed and investors
make good money in the IPOs to come.
The IPO we
are talking about today is Indian Energy Exchange Ltd(IEX). Lets first look at
the basics.
Particulars
|
Details
|
Company
|
Indian Energy
Exchange Ltd
|
Issue Open Date
|
9th
October 2017
|
Issue Closing Date
|
11th
October 2017
|
Issue Price Band
|
Rs 1645 to Rs 1650
|
Issue Size
|
Rs 1000.73 Crs
|
Shares per Lot
|
9 Shares
|
Face Book
|
Rs 10/-
|
About the
Company!!!
IEX Ltd are the
largest exchange for the trading of a range of electricity products in India,
in terms of traded contract volumes in the financial year 2017 according to the
Central Electricity Regulatory Commission (the “CERC”). Basically the company
provides a platform for energy trading.
Utilization of Funds!!!
The issue is a pure offer for sale. No money will go to the
company.
Promoters!!!
The company was earlier promoted by Financial Technologies
India Ltd. Due to the issues that surfaced in FTIL the company had to be
divested and therefore there is no real promoter in the company. Apart from DCB
no one holds more than 15% stake in the company.
This means the company is professionally managed.
Financials!!!
Now let’s
dive into the most important factor. The financials!
1. The company’s total Equity
attributable to the shareholders has grown from Rs 171.58 Crs as on 31.03.2013
to Rs 305.62 Crs as on 30.06.2017.
2. The company’s long term debts are
quite reasonable at Rs 40.18 Crs as on 30.06.2017
3. Something very important to note is
that the company has acquired some intangible asset in Q1 of FY 2017-18 which
has increased the total intangible asset from Rs 2.29 Crs as on 31.03.2017 to
Rs 117.61 Crs 30.06.2017.
4. Further the company’s major applications
of funds are in current investments, which stood at Rs 247.84 Crs as on
30.06.2017.
5. Company’s revenues have increased
from Rs 138.36 Crs in 2012-13 to Rs 237.42 Crs in 2016-17. Even in Q1 of
2017-18 the company has made revenue of Rs 61.66 Crs which if annualized would
be Rs 246.64 Crs. Quite good.
6. Profit of the company has also
increased from Rs 66.30 Crs in FY 2012-13 to Rs 113.56 Crs in FY 2016-17. Q1
2017-18 has showed a profit of Rs 30.63 Crs which if annualized would be Rs
122.52 Crs. Very well for this company.
Valuation!!!
The share
is priced at Rs 1645 to Rs 1650. The EPS of the company is Rs 37.78 basic and
37.66 diluted. At this price the PE at basic EPS will be around 44. Although there
are no other company to compare it with on the direct level, we can compare it
with other exchanges like MCX and BSE. MCX is trading at a PE of 43 and BSE is
trading at a PE of 40. Now this is wonderful pricing.
Therefore I
would say Indian Energy Exchange Ltd is a “subscribe”.
Thanks for
joining us friends.
Keep
learning !!!! Enjoy investing!!!!
-
RicherInvestor
-Written by
Roger Vins (CA, MCom)
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