Gensol Engineering Limited IPO

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(i) Gensol Engineering Limited (“Gensol”) is a Solar Design & Engineering company with a team of more than 500 employees and an experience of providing technical expertise over 18,000+ MW.

Consulting Business

Gensol provides concept to commissioning solar advisory, engineering review, detailed engineering, construction supervision, quality control, and technical due diligence services for projects in India and abroad. Over the past 5 years, Gensol has built a credible reputation as a one-stop solution across the entire value chain of the solar industry by advising Governments policymakers, leading project developers, Solar EPC Companies, Lending Institutions and Vendors alike.

EPC Business

Gensol also undertakes turnkey Engineering, Procurement and Construction contracts under it’s EPC Business, with international footprints, with the help of team of 180+ engineers. In all, Gensol has, so far, erected solar power plants with a cumulative capacity of more than 188 MW+ on roofs as well as lands. The Gensol is ISO 9001:2015 certified Company for solar consultancy and EPC.

Gensol has also expanded wings in the international market by providing Consulting Services in countries like Indonesia, Nepal, Afghanistan, Sierra Leone, Chad, Gabon, Philippines, Oman, Ukraine and, Kenya. We have also an ongoing EPC project in Egypt. We are also entitled to a subsidy in some of our projects from SECI.

International Collaboration

Gensol entered into a Joint Venture with Solarig N-Gage SA from Spain in March 2015, which has a global O&M experience to offer Operation & Maintenance Services (O&M Business) in India under Solarig Gensol Utilities Private Limited (“SGUPL”).

SGUPL provides preventive, corrective & predictive maintenance, onsite & remote SCADA monitoring & reporting, modules cleaning & vegetation abatement, facility management, health analysis, vendor warranty coordination etc. through computerized maintenance management system by IBM Maximo and thermo-graphic inspection & on-site IV Curve testing. SGUPL is maintaining over 2200+ MWp.

Subsidiary

Gensun Renewable Private Limited (“GRPL”), subsidiary of Gensol. GRPL is engaged in renewable power generation and sale activity. GRPL has already entered into Power Purchase Agreement (PPA) with 3 clients for selling electricity generated from a cumulative 1.4MW Solar PV capacity.

Objects of the Gensol Engineering Limited IPO:

The Objective of the Issue is: a) Funding the working capital requirement. b) General Corporate Expense.

Gensol Engineering Limited IPO Details:

Open Date: Sep 30 2019
Close Date: Oct 04 2019
Total Shares: 2,160,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Building
Issue Size: 17.93 Cr.
Lot Size: 1600 Shares
Issue Price: ₹ 81-83 Per Equity Share
Listing At: BSE SME
Listing Date: Oct 14 2019

Promoters And Management:

(a) Anmol Singh Jaggi, Promoter, Managing Director (b) Puneet Singh Jaggi, Promoter, Whole-Time Director

Financials of Gensol Engineering Limited IPO:

Year Revenue(Cr) EBITDA(Cr) OPM% PAT(Cr)  NPM% EPS
2017 62.31 1.82 2.9% 1.18 1.9% 1.44
2018 69.64 7.86 11.3% 5.33 7.7% 6.50
2019 83.58 9.79 11.7% 6.49 7.8% 7.91

Comparison With Peers:

(i) As per RHP, the company has shown Zodiac Energy Limited as its peer. Though, Gensol business is more of the operation and maintenance of solar plants rather then commissioning. Zodiac is more into EPC business. For Gensol, out of 340 cr order book, 260 cr comes from Operation and Maintenance. (ii) Zodiac Energy came with IPO in 2017 and listed at discount on NSE Emerge at Rs. 46 as against the issue price of 52. (iii) The price movement of Zodiac since listing. ( source: moneycontrol ) The share of the company is continuously falling since listing. (iv) Financial Performance of Zodiac Energy
Year Revenue(Cr) Expense(Cr) PAT(Cr)  NPM% EPS
2017 16.74 16.39 0.25 1.5% 0.69
2018 38.46 35.71 2 5.2% 3.81
2019 63.42 58.9 3.1 4.9% 4.24
Currently, at CMP of 24, Zodiac is available at P/E multiple of 5.66x. Conclusion: The Gensol is asking more valuation than its peer.

Recommendation on Gensol Engineering Limited IPO:

Review and Recommendation of InvestorZone is: 4/10 (i) The valuation at P/E multiple of 10.49x looks stretched as compared to Zodiac. (ii)  As per management, the EPC business contributes only 33% of the revenue and 66% comes from O&M. That means the existing companies for which Gensol is doing O&M of their solar plants looks like a steady income business until those companies give the contract to other players. In EPC business, there is a global slowdown which is affecting the profitability of many companies and Gensol would not be an exception. (iii) Sterling and Wilson, biggest EPC player in the world is recently listed in the stock market and currently available at discount.

Lead Manager of Gensol Engineering Limited IPO:

  1. Pantomath Capital Advisors Private Limited

Registrar of Gensol Engineering Limited IPO:

  1. Link Intime India Private Limited

Bid Details of Gensol Engineering Limited IPO as on
04 Oct 2019 | 05:00:00 PM

Category No.of shares offered No. of shares bid
1,026,000 2,332,800
1,026,000 380,800
108,000 108,000
2,160,000 2,821,600
QIBs No
QIBs+HNIs Subscription 2.27X
Retail Subscription 0.37X
Total Subscription 1.32X

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