Technofab Engineering Limited (TEL) has decided to open its Initial Public Offering (IPO) for subscription on Tuesday June 29, 2010 and to close on Friday, July 02, 2010. Fitch Ratings India Private Limited (Fitch Ratings) has assigned a grade of ‘3 (ind)’ out of a maximum of ‘5 (ind)’ to the proposed initial public offer of Technofab Engineering Limited (TEL). The grade indicates the average fundamentals of the issue relative to other listed equity securities in India.
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.
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.
“We are gradually moving up the value chain by targeting larger size assignments either independently or through joint ventures or MOUs. Having developed significant in-house expertise in important and major BoP packages we believe that we are well equipped to offer our services for the entire "Balance of Plant" covering all utilities and offsite packages of a typical power plant other than coal and ash handling systems”, says Mr. Avinash Gupta, Chairman & Managing Director, Technofab Engineering Ltd.
Technofab Engineering has filed the Red Hearing Prospectus with Registrar of Companies, NCT of Delhi and Haryana (RoC) to enter the capital markets with an Initial Public offering (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.
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 company is proposing an initial public offering to meet long term working capital requirements of Rs 300mn, finance procurement of construction equipment for Rs 162.38 mn, finance setting up of maintenance and storage facility for construction equipment for Rs 49.95 mn, setting up training centre for employees for Rs 54.07 mn and balance for general corporate purposes.
“To further exploit the potential for growth in international markets we have setup our offices in Ethiopia, Kenya and Fiji, as we also believe that there are substantial opportunities in Asia Pacific, West and South East Asia and Africa. A competitive cost of equipment as well as human resources in India gives us an additional advantage to compete with international companies”, added Mr. Avinash Gupta
Technofab Engineering is a professionally managed company, with a total workforce of 222 personnel as of 31st March, 2010. The company has achieved a turnover of Rs 2003.70 mn, PAT of Rs 190.90 mn & Networth of Rs 499.77 mn for FY 2010 (standalone basis). 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%. Its order book stands at Rs 5337.40 mn as on 31st March, 2010 which is 2.7 times sales of FY 10.
The shares of Technofab Engineering Limited will be listed on the BSE and NSE.
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 will be 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.”
