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Salasar Techno Engineering Ltd (STEL) is an ISO 9001: 2008, 14001: 2004 and 18001: 2007 certified company addressing the changing needs of the customers in Infrastructure space.

STEL is a provider of customised steel fabrication and infrastructure solutions in India for Telecommunication Towers, Transmission Towers & Substation Structures and Solar Module Mounting Structures. The objective of Company is to supply customized, high-quality material to its impressive and ever-growing clientele. It provides 360 degree solutions by carrying out engineering, designing, fabrication, galvanization and deployment. 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. STEL’s services include providing complete engineering, procurement and control for projects such as Rural Electrification, Power Transmission Lines, and Solar Power Plants.

The company recently increased its installed annual manufacturing/fabrication capacity from 50,000 MT to 1,00,000 MT with the installation of new Galvanizing Plant at its wholly owned subsidiary – Salasar Stainless Limited. It has also undertaken EPC Turnkey projects for solar mounting structures for clients.

The Company has a strong customer profile and caters to the leading names in India. These relationships have allowed is to carry out massive touchstone projects such as establishing Transmission and Substation for U.P. Power Transmission Corporation Ltd, Tata Power Delhi Distribution Ltd., Unitech Power Transmission Ltd., executing orders of Telecom Towers including erection of towers for ATC India Tower Corporation Pvt Ltd, Indus Towers Ltd, ATC Telecom Infrastructure Pvt Ltd, Bharti Infratel Ltd, Reliance Jio Infocomm Ltd, Tower Vision India Pvt Ltd, Viom Networks Ltd, and supplying Solar MountingModule Structures for Jakson Engineers Ltd, Prayatna Developers Pvt Ltd, Welspun Renewables Energy Pvt Ltd., Insta Power Energy Efficiency Pvt Ltd etc. The company has two manufacturing units.

To part finance its working capital, margin money and general corpus fund needs, the company is coming out with a maiden IPO of 3321000 equity share of Rs. 10 each at a fixed price of Rs. 108 per share to mobilize Rs. 35.87 crore. Issue opens for subscription on 12.07.17 and will close on 17.07.17. Minimum application is to be made for 125 shares and in multiples thereon, thereafter. The net issue will constitute 25.01% of the post issue paid up equity share capital of the company. Post allotment, shares will be listed on BSE and NSE. Issue is solely lead managed by Sarthi Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. From incorporation till January 2007 it issued equity shares at par. Thereafter it raised further equity in a price range of Rs. 30 to Rs. 200 per share during February 2007 to March 2015. It has also issued bonus shares in the ratio of 1 for 1 in June 2016. Post issue its current paid up equity capital of Rs. 9.96 crore will stand enhanced to Rs. 13.28 crore.

On performance front, the company has (on consolidated basis) posted turnover/net profits of Rs. 292.57 cr. / Rs. 6.26 cr. (FY14), Rs. 330..36 cr. / Rs. 6.32 cr. (FY15), Rs. 310.20 cr. / Rs. 11.18 cr. (FY16) and Rs. 384.64 cr. / Rs. 20.74 cr. (FY17). For last three fiscals, it has posted an average EPS of Rs.15.17. For FY 17 it has posted an EPS of Rs. 20.83. If we attribute latest earnings on fully diluted equity post issue then asking price is at a P/E of 6.8 plus and at a P/BV of 1.12. Last three fiscal’s average RoNW is 17.36 %. Peers are trading at a P/E of 18 plus. Thus issue is pricing is reasonable.

On merchant banker’s front, this is the first IPO for main board from its stable. It brought 28 SME IPOs since 2012 and out of last 10 IPOs listings, only 1 IPO opened below the offer price.

Company Financials:

Summary of financial Information (Consolidated)
ParticularsFor the year/period ended (in Rs. Million)
  30-Sep-16 31-Mar-16 31-Mar-15 31-Mar-14 31-Mar-13 31-Mar-12
Total Assets 1,678.71 1,540.29 1,457.10 1,667.45 1,114.96 989.02
Total Revenue 1,472.79 2,768.14 2,761.20 2,452.23 1,675.12 1,069.75
Profit After Tax 75.39 102.00 46.13 54.99 30.47 64.62

Objects of the Issue:

The object of the issue are:

1. To meet the working capital requirements of the Company including margin money;
2. General Corporate Purpose;
3. To meet the Issue Expenses.


Issue Detail:

  »»  Issue Open: Jul 12, 2017 - Jul 17, 2017
  »»  Issue Type: Fixed Price Issue IPO
  »»  Issue Size: 3,321,000 Equity Shares of Rs 10 aggregating up to Rs 35.87 Cr
  »»  Face Value: Rs 10 Per Equity Share
  »»  Issue Price: Rs 108 Per Equity Share
  »»  Market Lot: 125 Shares
  »»  Minimum Order Quantity: 125 Shares
  »»  Listing At: BSE, NSE

Conclusion: Issue is reasonably priced. But its initial listing (due to offer size below Rs. 250 crore) will take place in “T” group, which will remove speculative aspect for the issue. However, investors may consider investment for medium to long term.

Last modified on Wednesday, 12 July 2017

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