Technofab Engineering Limited (TEL) announced a price band of Rs 230 to Rs 240 for its Initial Public Offer (IPO) of 29,90,000 equity shares of face value of Rs.10 each (the Issue) for cash at a price to be decided through a 100% Book Building Process. The Issue comprises of a reservation of 50,000 Equity Shares of Rs.10 each for eligible employees with a discount of Rs 20 per share to the Issue Price. The issue will open for subscription on Tuesday, June 29, 2010 and close on Friday, July 02, 2010.
The Company would raise Rs.68.77 Crores at the lower end of the price band and Rs.71.76 Crores at the upper end of the price band. The upper band of the issue price is 24 times of the face value and the lower band of the issue price is 23 times of the face value. The issue will constitute 28.50% of the post issue paid-up equity capital of the company. The net issue will constitute 28.03% of the post issue paid-up equity capital of the company.
The Issue is being made through the Book Building Process wherein upto 50% of the Net Issue shall be reserved for QIBs, not less than 15% of the Net Issue shall be reserved for Non-Institutional Bidders and not less than 35% of the Net Issue shall be reserved for Retail Individual Bidders.
The company is proposing an initial public offering to meet long term working capital requirements of Rs 30 crores, finance procurement of construction equipment for Rs 16.24 crores, finance setting up of maintenance and storage facility for construction equipment for Rs 4.99 crores, setting up training centre for employees for Rs 5.41 crores and balance for general corporate purposes.
Technofab Engineering Limited has been assigned an ‘IPO GRADE 3 (ind)’ for its proposed Initial Public Offering indicating average fundamentals of the Issue by Fitch Ratings India Private Limited.
Technofab Engineering Limited (TEL) is engaged in the business of providing Engineering Procurement and Construction (EPC) services, and executing a wide range of Balance-of-Plant (BoP) and electro-mechanical projects on a complete turnkey basis, taking up individual turnkey packages relating to Low Pressure Piping Systems, Fuel Oil Handling Systems and Fire Protection Systems and eventually executing comprehensive electromechanical packages involving all engineering disciplines viz. mechanical, electrical, control and instrumentation, environmental and civil.
Technofab Engineering provides EPC services to domestic and overseas markets across a number of industrial and infrastructure sectors which includes conventional power, nuclear power, oil & gas, water & waste water treatment, electrical distribution & rural electrification and other industrial & infrastructure sectors. Apart from India, the company has presence in international markets like Ethiopia, Kenya and Fiji.
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“As of March 31, 2010, we have bid for 41 projects approximately worth Rs 2200 crore and as per the information available to us, we are the lowest bidder for 5 projects approximately worth Rs 400 crore. We are gradually moving up the value chain by targeting larger size assignments either independently or through joint ventures or MOUs and would like to target the huge opportunity for EPC business lies in the niche segments like Electrical Distribution & Rural Electrification and Nuclear Power along with the industrial & infrastructure sector, Water, Conventional Power and Oil & Gas. Also, we believe that there are substantial opportunities in Asia pacific, West and South East Asia and Africa, where we aim to be in projects which are likely to be subject of developmental finance particularly in the water & waste water segment,” says Mr. Avinash Gupta, Chairman & Managing Director, Technofab Engineering Ltd.
Between FY 2008 to FY 2010, the Company’s sales increased at a CAGR of 48% and PAT has grown at a CAGR of 189%, while its order book stands at Rs 533.74 crores as on 31st March, 2010 which is 2.7 times sales of FY 10. Technofab Engineering has achieved a turnover of Rs 200.37, PAT of Rs 19.09 crore & Net worth of Rs 49.98 crore for FY 2010 (standalone basis) and has a total workforce of 222 personnel as of 31st March, 2010.
The Equity Shares of Technofab Engineering Limited will be listed on the Bombay Stock Exchange and National Stock Exchange.
Collins Stewart Inga Pvt. Ltd. is the sole Book Bunning Lead Manager to the Issue and Link Intime India Pvt. Ltd. is the Registrar to the Issue.
Disclaimer: “The Issuer, is proposing, subject to market conditions and other considerations, a public issue of its equity shares and has filed a Red Herring Prospectus with the Registrar of Companies, National Capital Territory of Delhi and Haryana ("RoC") and the Securities and Exchange Board of India (“SEBI”). The Red Herring Prospectus is available on the website of SEBI at www.sebi.gov.in as well as on the website of the Book Running Lead Manager at www.csinga.com. Any potential investor should note that investment in equity shares involves a high degree of risk. For details, potential investors should refer to the Red Herring Prospectus including the section titled “Risk Factors” on page 10 of the Red Herring Prospectus. This announcement has been prepared for publication in India and may not be released in the United States. This announcement does not constitute an offer of securities for sale in any jurisdiction, including the United States, and any securities described in this announcement may not be offered or sold in the United States absent registration under the US Securities Act of 1933 or an exemption from registration.”