Divine Power Energy Limited IPO

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Divine Power Energy Limited, originally incorporated on August 24, 2001, as ‘PDRV Enterprises Private Limited,’ has undergone several transformations. The company’s name changed to ‘Dee Power and Electricals Private Limited’ on January 5, 2023, and subsequently to ‘Divine Power Energy Private Limited’ on June 10, 2023. It transitioned from a private limited company to a public limited company on July 17, 2023, with the final name change to ‘Divine Power Energy Limited.’

Products and Services

Divine Power Energy Limited specializes in the manufacturing of:
i. Bare Copper/Aluminium Wire                         ii. Bare Copper/Aluminium Strip
iii. Winding Copper/Aluminium Wire               iv. Winding Copper/Aluminium Strip

The manufacturing process involves annealing, insulating, and covering the wires/strips with materials such as paper, cotton, and fiberglass. These products are primarily used by power distribution companies and transformer manufacturers to produce and maintain transformers.

Market and Applications

The company’s primary market includes power distribution companies and transformer manufacturers. Transformers are essential in power distribution for regulating voltage from generation sources to end-users. Divine Power Energy’s winding wires and strips are critical components in transformer coils, which convert electrical energy to magnetic energy and back to electrical energy, adjusting voltage and current as required.

Clientele and Suppliers

Divine Power Energy Limited enjoys the patronage of reputed clients, including:
i. TATA Power Limited                                                 ii. Pashchimanchal Vidyut Vitran Nigam Limited
iii. BSES                                                                           iv. Madhyanchal Vidyut Vitaran Nigam Limited
v. Dakshinanchal Vidyut Vitran Nigam Limited     vi. Purvanchal Vidyut Vitaran Nigam Limited
vii. Uttarakhand Power Corporation Limited

Reliable raw material suppliers include NALCO, Birla Copper, and Hindalco, ensuring uninterrupted supply chains.

Government Support and Future Growth

India’s power transmission sector faces significant losses, with AT&C losses currently at 17-18% in states like Uttar Pradesh, Haryana, and Rajasthan. The Government of India aims to reduce these losses to 5% by 2026 under the Revamped Distribution Sector Scheme, allocating Rs. 3,03,758 crore and a Gross Budgetary Support of Rs. 97,631 crore for upgrading power infrastructure.

As the government revamps the power infrastructure, replacing old transformers with new ones, the demand for Divine Power Energy’s products is expected to surge. The company is poised for higher growth, contributing to the nation’s energy security and sustainable development goals.

Conclusion

Divine Power Energy Limited, with its extensive product range, robust quality control, and strategic market positioning, is well-equipped to meet the growing demands of the power distribution sector. Supported by government initiatives and a commitment to quality, the company is set to achieve significant growth and contribute to India’s energy security sustainably.

Objects of the Divine Power Energy Limited IPO:

The company intend to utilize the proceeds of the Issue to meet the following objects: - i. To meet the working capital requirements of the Company; and ii. General Corporate Purpose
DRHP of Divine Power Energy Limited IPO
RHP of Divine Power Energy Limited IPO

Divine Power Energy Limited IPO Details:

Open Date: Jun 25 2024
Close Date: Jun 27 2024
Total Shares: 5,690,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 22.76 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 36 - 40 Per Equity Share
Listing At: NSE Emerge
Listing Date: Jul 02 2024

Promoters And Management:

Mr. Rajesh Giri holds a “B.A, LL.B.” degree, showcasing a solid foundation in business and financial education. His academic background equips him with the necessary knowledge and skills to contribute effectively to the strategic decision-making processes within the company. He has more than two decades of experience in running the Company. Under his leadership and vision, the company has achieved many operational milestone and technological advancement. He dynamically manages the affair of the company and always looks for new opportunities and technological innovations. Mr. Vikas Talwar has more than two decades of experience in running the Company and he is under graduate. With expertise in business, commerce and operations he brings valuable insights to the boardroom discussions, aligning his educational background with the company's operational and
managerial needs. He manages the operations of the company. Ms. Dali Giri holds a “Bachelors of Arts (Honours Course)” degree from University of Delhi, showcasing a solid foundation in business. Her academic background equips her with the necessary knowledge and skills to contribute effectively to the strategic decision-making processes within the company. Having 29+ Years of experience in the line of Manufacturing of Insulated Wire & Strip.

Financials of Divine Power Energy Limited IPO:

Particular (In lakh) Mar-22 Mar-23 Mar-24
Revenue from Operations 12,249 15,058 22,208
Cost of Material Consumed 12,769 13,040 20,399
Purchase of stock-in-trade 19 1,071. 1,653
Change in Inventories -1430 -394 -1771
Employee Cost 86 66 129
Other Expenses 275 266 363
EBITDA 530 1009 1435
EBIDTA Margin 4.33% 6.70% 6.46%
Other income 41 26 64
Depreciation 69 120 145
Interest 391 451 540
Profit before tax 111 464 815
Tax 30 179 175
Net profit 81 285 640
NPM (%) 0.66% 1.89% 2.87%
EPS 0.38 1.33 2.98

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Divine Power Energy Limited 222 6 2.98 13.4 40 86
Shera Energy Limited 875 14 5.21 37.1 171 390
Bhagyanagar India Limited 1,431 46 14.29 7.5 108 344
Rajnandini Metal Limited 1,212 15 0.55 19.2 10.6 293
Ram Ratna Wires Limited 2,983 55 11.88 31.5 375 1,650
Precision Wires India Limited 3,321 73 4.08 41.8 170 3,046
* All the data is as per FY24.

Recommendation on Divine Power Energy Limited IPO:

Review and Recommendation of Divine Power Energy by team IZ is 6/10. 1. Divine Power Energy Limited specializes in the production of winding wires and strips, which are essential components in the manufacturing and maintenance of transformers. These products are insulated with materials such as paper, cotton, fiberglass, and super enamel to ensure their suitability for different industrial uses. The company primarily serves power distribution companies and transformer manufacturers, providing critical components that facilitate efficient power transmission and distribution. 2. Strategic Positioning and Clients Divine Power Energy Limited enjoys the patronage of reputed clients such as TATA Power Limited, Pashchimanchal Vidyut Vitran Nigam Limited, BSES, Madhyanchal Vidyut Vitaran Nigam Limited, Dakshinanchal Vidyut Vitran Nigam Limited, Purvanchal Vidyut Vitaran Nigam Limited, and Uttarakhand Power Corporation Limited. The company sources its raw materials from reliable suppliers, including NALCO, Birla Copper, and Hindalco, ensuring uninterrupted supply and stable operations. 3. Market Presence and Future Prospects The company has a strong market presence in North India, particularly in Uttar Pradesh, Delhi, Uttarakhand, Haryana, Punjab, and Bihar. Recently, the company has ventured into new markets, including Punjab, Karnataka, and Gujarat, by offering fiberglass-insulated winding wires for the manufacturing of electromagnetic field coils. The company sees significant growth potential in Mumbai, given the city's large port and shipping industry. Future plans include catering to the solar and automobile ancillary industries by offering tinned copper wires. These wires are used in the manufacturing of solar panels and harness wires for automobiles. 4. Competition Divine Power Energy Limited operates in a competitive market, facing stiff competition from established players such as Shera Energy Limited, Bhagyanagar India Limited, Rajnandini Metal Limited, Ram Ratna Wires Limited, and Precision Wires India Limited. These competitors produce a wide range of aluminium and copper winding wires, as well as other products such as tubes, billets, rods, sheets, nuggets, and bus bars. Despite the competition, Divine Power Energy Limited remains competitive due to the high demand for its products and its ability to deliver quality and innovation consistently. 5. The Revenue has Increased from Rs.122 Crores in FY22 to Rs.222 Crores in FY24. 6. The EBITDA has Increased from 5 Crores in FY22 to 14 Crores in FY24. 7. The PAT has Increased from 81 Lakhs in FY22 to 6 Crores in FY24. 8. As per FY24, CFO/EBITDA is 0.97, and EPS is 2.98, 9. Market Capitalization is 86 Crores and P/E is 13.4x based on FY24.

Lead Manager of Divine Power Energy Limited IPO:

  1. Khambatta Securities Limited

Registrar of Divine Power Energy Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Divine Power Energy Limited Unit No. Offices, 1st Floor CSC-II, B-Block, Surajmal Vihar New Delhi-110092, Phone: 011-36001992 Email: info@dpel.in Website: https://www.dpel.in/

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