Kranti Industries Limited IPO

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(i) The Company was incorporated in the year 1995. The Company initially catered to the tractor industry in the automotive sector with major dependency on very few customers. Further, with a view to expand the business and undertake additional orders, the Company acquired a majority stake in “Wonder
Precision Private Limited” in the year 2013 (Subsidiary).

The Subsidiary is engaged in the business of manufacturing of precision machined components primarily for the automotive industry and is located at Plot No. J-63, Bhosari, MIDC, Pune Maharashtra.

With an operating history of more than two (2) decades, Kranti Industries is primarily known for range of automotive component and non-automotive (off highway) components.

(ii) They manufacture various automotive components varying from 100 MM to 1200 MM in size. They manufacture customized products for reputed Original Equipment Manufacturers (OEMs) of diverse industries such as passenger cars, electric cars, two-wheelers, tractors, construction machinery railways, light vehicles, off-highway, heavy trucks etc.

(iii) Over the years the Company has diversified its product portfolio and presently caters to various sectors by developing components for construction, automobile, commercial vehicle, pneumatic tool, windmill medical industry, etc.

(iv) They have a diversified client base and are committed to continuing to diversify our product offerings, customer base, and geographical footprint, thereby minimizing the exposure to individual geographies, industry sectors,

Top Client List: 

Graziano  Transmission India Pvt. Ltd, John Deere India Pvt. Ltd, CNH Industrial (India) Private Limited formerly known (New Holland Fiat (I) Pvt. Ltd), Carraro India Pvt. Ltd, Jaya Hind Industries Limited, Endurance Technologies limited, Neosym Industry Limited (Sanaswadi) and Meltwel Scrap Traders, etc.

Manufacturing Plant

They have two manufacturing units adjacent to each other located at Pune, Maharashtra having a total area of approximately 4,100 square meters and 2,730 square meters respectively.

Quality Certificates:

The manufacturing units have received ISO 9001:2015 and IATF 16949:2016 certification from Kiwa Cermet Italia.

Further, the Company has received “Performance Appreciation Award” for outstanding contribution for new part development in casting and machining commodity from Oerlikon in the year of 2018.

Order Book

The current Order Book as on 18.01.2019 is approximately ₹ 9.30 Cr

Kranti Industries Limited IPO Stock Quote & Charts

32.00

-2.29%

  • Open: 32.00
  • High - Low: 32.00 - 32.00
  • Previous Close: 32.75
  • Total Traded Volume: 3000
  • Updated On: 16-Aug-2019

Objects of the Kranti Industries Limited IPO:

The Offer comprises a (i) Fresh Issue of 17,52,000 Equity Shares, aggregating to ₹ 648.24 Lakhs a) To meet working capital requirement b) General corporate expenses, and c) To meet the Offer expenses (ii) An Offer for Sale of 5,67,000 Equity Shares, aggregating to ₹ 209.79 Lakhs by the Selling Shareholder.

Kranti Industries Limited IPO Details:

Open Date: Feb 14 2019
Close Date: Feb 20 2019
Total Shares: 2319000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price
Issue Size: 8.58 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 37 Per Equity Share
Listing At: BSE SME
Listing Date: Feb 28 2019

Promoters And Management:

The Promoters of the Company Mr. Sachin Subhash Vora, Mr. Sumit Subhash Vora and Mrs. Indubala Subhash Vora, have more than fifteen (15) years of experience in the automotive industry. The Promoters have sound knowledge of manufacturing process, marketing, finance and all kind of other commercial activities related to the automotive industry.

Financials of Kranti Industries Limited IPO:

(Particulars in Lakhs)

Year Revenue EBITDA EBITDA% PAT PAT % Equity EPS
2016 2,884.41 616 21.4% -13 -0.5% 70.5 -0.2
2017 2,925.19 489 16.7% -111 -3.8% 70.5 -1.6
2018 4,610.92 579 12.6% 60 1.3% 70.5 0.9
Sep-18 3,321.91 468 14.1% 203 6.1% 70.5 2.9
Post Issue 88.02 2.3
 
Year ROE ROCE D/E Current Ratio Receivable days
2016 -1.0% 8.6% 1.61 0.80 62
2017 -9.1% 5.7% 1.66 0.81 95
2018 4.6% 10.7% 1.47 0.92 71
Sep-18 14.1% 10.9% 1.54 0.98 136
Post-Issue 1.06
Financials of Subsidiary
Particulars(Lakh) FY17-18 FY16-17 FY15-16
Paid Up Capital 1 1 1
Reserves and Surplus -58.09 -36.789 -6.29
Net Worth -57.09 -35.79 -5.29
Sales and Other Income 400.48 453.91 295.387
Profit -21.28 -30.49 7.59
IZ Review 1. The company has shown 26.43% revenue growth in the last 3 years. 2. The company EBITDA Margins is continuously decreasing in the last 3 years. 3. The company has made losses in FY16 and FY17, however, for FY18 the company turns profitable. Moreover, the Subsidiary of the company is also in losses in FY17 and FY18. 4. The Current Ratio is less than 1 in the last 3 years. Ideally, it should be above 1.5. 5. The D/E would stand at 1.06 post issue. 6.  The PAT for FY18 stands at 60 Lakh, however, for the first 6 months of FY19,  the company has made a profit of 203 lakh which is surprising. On one hand, the Profit is increasing and another hand Receivables are going up. The Receivables days have gone up from 71 days in FY18 to 136 Days in 6MFY19 which is worrisome. 7. EPS Calculation ( done separately as 6MFY19 earnings shown spike) Pre-IPO Based on FY18 earnings = 0.9 Post-IPO= 0.68 Pre-IPO Based on Annualized FY19 earnings = 5.75 Post-IPO= 4.61 Pre-IPO P/E based on FY18 earning= 41 Post-IPO= 54 Pre-IPO P/E based on Annualized FY19 earnings= 6.43 Post-IPO= 8.02

Recommendation on Kranti Industries Limited IPO:

Review and Recommendation of Kranti Industries Limited IPO by IZ team are: 3/10. [ The company has a good client base. However, the performance of the company in the last 3 years has not been satisfactory. The Profit spike up in the first 6MFY19 is a bit surprising. The EBITDA Margins are decreasing in the last 3 years. The Lead Manager of the IPO is also new.]

Lead Manager of Kranti Industries Limited IPO:

  1. Fast Track Finsec Private Limited

Registrar of Kranti Industries Limited IPO:

  1. Link Intime India Private Limited

Bid Details of Kranti Industries Limited IPO as on
20 Feb 2019 | 11:58:06 PM

Category No.of shares offered No. of shares bid
1,101,000 1,398,000
1,101,000 1,443,000
117,000 117,000
2,319,000 2,958,000
QIBs Yes
QIBs+HNIs Subscription 1.27X
Retail Subscription 1.31X
Total Subscription 1.29X

Discussion on Kranti Industries Limited IPO:

    As I said earlier, avoid this IPO. The listing at 35.25 against the issue price of 37.

    Negative Listing

    New LM is very risky. The company has high debt too. Let’s see how it performs. Apart from electric cars future prospect there is nothing in this issue worth looking at.

    Avoid this. Financial seems to be cooked. Just before too they turn to profit to come up with IPO. It had new lead manager which have never been heard of.This one is too risky.

    I have also not heard of the company much, but have read two-three articles on other portals which shows that the company will do good, but if anyone can send some more information links about the company.
    Thanks in Advance.

    I think as the company will do good as they have strong clients and is dealing in electronic cars manufacturing which has great potential in the future, So a good IPO to invest in.

    I think i agree with Market Wizard. I was reading any article and found this which is why i agree:

    On financial performance front, for last three fiscals, KIL has (on a consolidated basis) posted turnover/net profit (loss) of Rs. 28.84 cr. / Rs. – (0.21) cr. (FY16), Rs. 29.25 cr. / Rs. – (0.93) cr. (FY17) and Rs. 46.11 cr. / Rs. 0.90 cr. (FY18). For the first half of current FY19, it has earned net profit of Rs. 1.37 cr. on a turnover of Rs. 33.22 cr. For FY16 it suffered a setback due to lower off take of components by tractor sector due to poor monsoon. As the company was having nearly 85% turnover from this segment, it felt the pinch in line with general trends. Having realized the risk of major supply to one segment, it started expanding its product range to cover other automobile and heavy equipment segment for which it made heavy capex.

    Due to this, FY17 too it had to suffer as new machinery and product development took time adding interest and depreciation Burdon. With investment and time consuming diverse product profile developments from late FY16 and FY17, it regained its prime status of niche component supplied to varied segments like four wheelers, two and three wheelers, heavy construction equipments etc; from the following fiscal. This is indicative in its performance for FY18 and H1 of FY19.

    For last three fiscals, it has posted an average EPS of Rs. 0.15 and an average RoNW of 0.63%. Loss for FY16 and FY17 impacted its average earnings and this has happened for the first time in the history of KIL as explained by the management.

    It is very difficult to judge the performance of the company as only 3 years Financials performance is given and the Company is in losses for FY16 and FY17.

    FY18 and 6MFY19 performances have marked differences. The company has shown improved performances in terms of Revenue Growth, Profitability, ROE, ROCE etc in 6MFY19. However, the only issue is, it is difficult to judge company performance and prospect by seeing the first 6-month
    performance and that too just before IPO.

    Promoter selling is also a negative point.

    It would be useful if the company provides a Financial report for FY12, FY13, FY14, and FY15 so that more insight can be checked.

    The EPS calculation has also seemed difficult. Usually, I find an average of the last 3 years to calculate the EPS and avoid 6M, 9M as many times it may be cooked. However, the FY16 and FY17 losses made my task difficult.