Latteys Industries Limited IPO

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Overview of the Latteys Industries Limited IPO

(i) The Company is India’s leading manufacturer of energy efficient submersible pumps and well-known name in the industry. They create their products for a number of sectors including agricultural, industrial, domestic and horticultural.
(ii)
The Company is in the business of manufacturing of pumping solutions for Domestic, agriculture & Industrial sectors. Pumps include Submersible, Self-Priming, Centrifugal Monoblock, Shallow-well and Horizontal Openwell Submersible Pumpsets .
(iii Since 2004, the company has manufactured more than 700 models of pumps at its portfolio. These pumps are manufactured and marketed all over India and they are a pioneer in manufacturing Submersible pumps.
(iv) The company started manufacturing in the year 2004 in Chhatraal, Gujarat and moved to a strategic location of GIDC Naroda, Gujarat with an area of 5,718 sq. meters in the year 2011. The company currently has an installed production capacity of approximate 1,20,000 pumps per annum. The manufacturing facilities are equipped with requisite machinery, measuring instruments and testing equipment to keep up a constant check on quality.
The products are having BIS mark as under:
1) Submersible Pumpsets 
2) Regenerative Self-priming Pumpsets
3) Electrical Monoset Pumps 
4) Openwell Submersible Pumpsets 

Latteys Industries Limited IPO Stock Quote & Charts

57.20

+9.37%

  • Open: 57.20
  • High - Low: 57.20 - 57.20
  • Previous Close: 52.30
  • Total Traded Volume: 2000
  • Updated On: 10-Oct-2018

Objects of the Latteys Industries Limited IPO:

Objective of

Latteys Industries Limited IPO

are: 1. Funding the Working Capital Requirement of Company 2. General Corporate Purposes

Latteys Industries Limited IPO Details:

Open Date: May 23 2018
Close Date: May 28 2018
Total Shares: 12,22,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue IPO
Issue Size: 8.06 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 66 Per Equity Share
Listing At: NSE Emerge
Listing Date: Jun 05 2018

Promoters And Management:

Promoters of Latteys Industries Limited Company are: Mr. Kapoor Chand Garg Mr. Pawan Garg

Company Business:

(i)First, the company procures raw material and pump parts from Gujarat. (ii) Then, they manufacture pumps and motors from them at Naroda, GIDC Gujarat. Presently, the manufacturing facility operates at an efficiency of 80% of the installed capacity. (iii) Then the finished products i.e Pumps and Motors are transported through third-party vendor to different parts of the country. (iv) The 98.25% of their finished goods sold in Gujarat, Bihar and UP only. (v) The 60% of the Revenue comes from single customer i.e. V-Guard Industries. Loosing of this customer means a big loss to the business. (vi) The business of the company is highly competitive as there are big players in the market like Kirloskar and Shakti Pumps who enjoy the benefits of brand image and many small-medium players which cater to customers requirement at an affordable price. So the business environment is really tough for the company.

Capital Structure:

(i) Authorized Share Capital (50,00,000 shares at FV@10) 5 Cr
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (33,77,666 Shares at FV@10) 3.378 Cr
(iii) Present Issue (  12,22,000 Shares at FV@10) 1.22 Cr
(iv) Reservation for Market Maker  ( 62,000 Shares at FV@10) 6.2 Lacs
(v) Net Issue to Public (12,22,000-62,000=  11,16,000 Shares) 1.116 Cr
(vi) QIB & HNI quota-5,80,000 50%
(viii) Retail Quota - 5,80,000 50%
(ix) Paid Up Share Capital after the issue 4.598 Cr

Financials of Latteys Industries Limited IPO:

 
1. Assets and Liabilities Key Parameter
Year Asset(Lacs) Liabilities(Lacs) Net Worth(Lacs) Book Value D/E RONW Receiveable days
FY14 1255.35 1164.76 90.59 11.84 12.9 15.60% 73
FY15 1466.07 1332.57 133.5 13.40 10.0 10.47% 56
FY16 2014.35 1764.77 249.58 16.18 7.1 12.46% 77
FY17 2611.95 2306.75 305.2 19.79 7.6 18.22% 68
6MFY18 2628.76 2283.10 345.66 21.79 6.6 8.81% 76
Post Issue 1203.38 26 1.9
2. Profit n Loss Key Parameter (i) The Revenue of the company in last 5 years ( FY14 to 6MFY18) is 18.55 Cr, 21.53 Cr, 26.05 Cr, 35.77 Cr and 15.27 Cr respectively. The Company is growing at a CAGR of 24.47%. The Company has shown decent Growth in the last 5 years. (ii) The PAT of the company in last 5 years ( FY14 to 6MFY18) is 14.09 Lacs, 13.98 Lacs, 31.09 Lacs, 55.62 Lacs, and 30.46 Lacs respectively. The Company is growing at a CAGR of 58.36%. (iii) The EBITDA Margins of the company for FY14( 4.8%), FY15(5.55%), FY16(6.06%) ,FY17(6.79%) and 6MF18(8%) . The Company margins have almost doubled in last 5 years. (iv) P/B(post issue)= 2.53 (at cutoff price of 66) (v) Annualized EPS(post issue)= 1.32 (vi) Annualized P/E(post issue)= 50 at the cutoff price of 66
3. Cash Flow Statement(all figures in Lacs)
Particulars FY17 FY16 FY15 FY14
(i) Net Cash Generated from Operation 118.51 28.9 43 -275.42
(ii) Net Cash Generated from Investment -53.74 -132.42 -94.62 -300.53
(iii) Net Cash Generated from Financing Activity 2.07 116.75 54.23 583.49
(iv) Total[ (i)+(ii)+(iii) ] 66.84 13.23 2.61 7.54
Key Observations 1. Continuous pile of inventory needs to be look upon. As on 6MFY18 , the company has inventory of 12 Cr which is roughly 80% of the revenue. This high inventory if not converted into sales may affect cash flows in future. 2. The Company has borrowed loan between 2013 to 2017 to increase capacity expansion of their manufacturing unit. 3. The Company's margins has almost doubled in 5 years which is big positive for the company. 4. The issue is priced at P/E of 50 which is quite high as compared to the established player in the market such as Shakti Pump, Kirloskar Brothers and Roto Pumps which are trading at 41,33 and 19.85. For an SME company, the asking price is very high. 5. The Company in the month of Jan 2018 has issued 1,02,400  shares to the Jwala Prasad Garg and Kapoor Garg at Rs. 50 against the unsecured loans availed by the company in the past.

Comparison With Peers:

Sr.no Name of the Company FV EPS PE RONW(%) CMP(19.05.2018)
1 Shakti Pumps 10 14.75 41 9.50% 618
2 Kirloskar Brothers 2 8.25 33 3.93% 273.65
3 Roto Pumps 2 19.51 19.51 10.44% 98.5
4 Latteys Industries Limited 10 1.32 50 8.81% 66

Recommendation on Latteys Industries Limited IPO:

Review and Recommendation of

Latteys Industries Limited IPO

from our side is: The Company valuations are very high. Rating: 3/10. 1-5: Fair 5-7: Good 7-10: Excellent .

Lead Manager of Latteys Industries Limited IPO:

  1. Pantomath Capital Advisors Private Limited

Registrar of Latteys Industries Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Latteys Industries Limited Plot No. 16, Phase 1/2, GIDC Estate, Naroda, Ahmedabad-382330, (Guj.) India. E-mail:info@latteysindustries.com Phone No. +91 79 22822894, 22823354

25th Sep 2018 - 27th Sep 2018 => Aavas Financiers IPO

Bid Details of Latteys Industries Limited IPO as on
28-May-2018 18:30:00 IST

Category No.of shares offered No. of shares bid
580,000 692,000
580,000 2,192,000
62,000 62,000
1,222,000 2,946,000
QIBs No
QIBs+HNIs Subscription 1.19X
Retail Subscription 3.78X
Total Subscription 2.49X

Discussion on Latteys Industries Limited IPO: