Marshall Machines IPO

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(i) Company’s Overview

The Company was originally formed on May 23, 1994, in the name of V. B Spinning Mills. The Company’s name was changed to ” Marshall Machines Private Limited” on Jan 02, 2002. Thereafter, the control and management of the company were taken by Gaurav and Prashant Sarup, along with their father Late Shri Gautam Sarup.

(ii)  Business of the Company

The Company is into the business of Developing, Manufacturing, and Marketing of Machine tool equipment. The business was originally founded by Mr. Gautam Sarup, who set up the business in the name and style of ” Marshall Industries” more than 54 years ago to initially manufacture hosiery machines. In coming years business moved to the design & manufacturing of High Precision Bench Lathes, Heavey Duty Lathes, & Capstan Lathes. The firm became a known brand in the manufacture of lathes. It was amongst the first Indian CNC Machines manufacturers and launched CNC machines way back in 1998.

(ii) Story of Marshall Industries

a)  In 1997, Marshall Industries entered into a technical tie-up with an American Company (M/s Path Wizard Inc) to export the mechanical and basic electrical elements of CNC lathes to the USA.

b) In 1998, Marshall Industries launched CNC lathes with Siemens/ Fanuc- CNC Controls in India during ” IMTEX- 98″ exhibition held at New Delhi and has been manufacturing CNC Lathes since then. Later, Mr. Gautam Sarup was joined in the business by his sons Gaurav and Prashant Sarup( promoters) after completing their engineering education. As a team, they grew the product range to include All Geared Lathes , Multi Spindel Drilling/Taping Machines and Special Purpose Machines.

(iv)  Acquisition of Marshall Industries

In April 2006, the Marshall Machines took over the running business of M/s Marshall Industries on as an where basis by allotting 3,40,000 Equity Shares in the company. Following Acquisition of M/s Marshall Industries by the company, all business of Marshall Industries shifted to the company.

(v)  Awards and Recognition

Marshall has won several national awards for its products and technology and has come to be known as an innovative machine tool manufacturer in India and pioneer of ” Intelligent Automation“.

(vi) Current Product Portfolio

a) Patented Double and Four Spindle CNC Machines
b) Automated Robotic Solutions
c) Patent pending IOTQ suite for Intelligent equipment.
This innovative product line has brought high productivity, cost-effectiveness, and near zero defect production to its marquee customer base.

Marshall Machines IPO Stock Quote & Charts

36.00

+9.09%

  • Open: 35.00
  • High - Low: 36.00 - 34.00
  • Previous Close: 33.00
  • Total Traded Volume: 12000
  • Updated On: 13-Nov-2018

Objects of the Marshall Machines IPO:

Objective of Marshall Machines Limited IPO are: 1. Capacity Augmentation 2. Up gradation of Existing R&D unit and IOTQ Center 3. Establishment of new IOTQ Centers 4. Working Capital Requirement 5. General Corporate Purpose 6. Issue Expenses

Marshall Machines IPO Details:

Open Date: Aug 28 2018
Close Date: Aug 30 2018
Total Shares: 4,053,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price IPO
Issue Size: 17.02 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 42 Per Equity Share
Listing At: NSE Emerge
Listing Date: Sep 07 2018

Promoters And Management:

  Promoters of Marshall Machines Limited Company are: 1. Mr. Gaurav Sarup 2. Mr. Prashant Sarup

Capital Structure:

(i) Authorized Share Capital (1,50,00,000 Equity shares at FV=10) 15 Cr
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (106,80,000 Equity Shares at FV=10) 10.68 Cr
(iii) Present Issue ( 38,70,000 Equity Shares at FV=10) 3.87 Cr
(iv) Reservation for Market Maker (1,98,000 Shares at FV=10) 19.8 Lacs
(v) Reservation for QIB & HNI (18,36,000 Equity Shares at FV=10) 50%
(vi) Reservation for Retail (18,36,000 Equity Shares at FV=10) 50%
(vii) Paid Up Share Capital after the issue 14.55 Cr
Average cost of Aquisition of the Promoters
Sr.no  Name of the Promoter No. of shares Average cost of acquisition
1 Gaurav Sarup 4776950 1.79
2 Prashant Sarup 4933325 4.64
 

Financials of Marshall Machines IPO:

1. Assets and Liabilities Key Parameters
Year Asset(lacs) Liabilities(lacs) Net Worth(lacs) Book Value D/E (<2) RONW Receiveable days
FY14 5270.74 4461.88 808.86 44.69 5.52 7% 37
FY15 5955.71 5121.89 833.82 46.06 6.14 3% 43
FY16 5935.76 5060.41 875.35 48.36 5.78 5% 39
FY17 6503.73 5517.87 985.86 54.46 5.60 11% 59
FY18 7964.13 6177.07 1787.06 83.66 3.46 28% 70
Post Issue 3487.06 23.97 1.77 14%
2. Profit n Loss Key Parameters
Year Revenue(lacs) PAT(lacs) EBITDA Margins Profit Margins Outstanding Shares(lacs) EPS
FY14 3928.43 58.76 13.1% 1.5% 18.101 3.25
FY15 4257.46 24.96 14.5% 0.6% 18.101 1.38
FY16 4390.66 41.53 12.7% 0.9% 18.101 2.29
FY17 5054.42 110.49 12.9% 2.2% 18.101 6.10
FY18 5,942.43 500.3 21.7% 8.4% 21.360 23.42
Post Issue 145.5 3.44
3. Cash Flow Statement(all figures in lacs)
Particulars FY18 FY17 FY16 FY15 FY14
(i) Net Cash Generated from Operation 415.31 1087.16 708.22 -84.56 143.08
(ii) Net Cash Generated from Investment -892.48 -509.18 -104.9 -30.87 -240.59
(iii) Net Cash Generated from Financing Activity 505.71 -517.32 -540.19 107.52 -94.72
(iv) Total[ (i)+(ii)+(iii) ] 28.54 60.66 63.13 -7.91 -192.23
(v) Cash and Cash Equivalents at the Beginning of the Year 193.37 132.71 69.57 77.48 269.72
(vi) Cash and Cash Equivalents at the end of the Year 221.91 193.37 132.70 69.57 77.49
Key Notes: a) The Revenue is growing at CAGR of 11% from FY14 to FY18. b) The PAT is growing at CAGR of 71.35% from FY14 to FY18. c) The Annualized EPS[ Post Issue] =3.44 d) P/E(post issue)= 12.2[ Reasonably Priced]. e) P/B(post issue)= 1.75[ Reasonably Priced] f) D/E(post issue) =1.77(manageable) g) Mcap/Sales(ideally <2)= 1.03 on FY18 sales(Reasonable). i) The Company has manageable recieveable days of 70 in FY18. The Receivables/Sales stands at 19%.

Comparison With Peers:

Company FV Mcap(cr) EPS P/E RONW Mcap/sales
Marshal Machines 10 61 3.43 12.24 14.33% 1.03
CNC Machines 10 204 7.12 29.27 13.00% 1.9
Lokesh Machine Limited 10 98 2.73 21 3.41% 0.56
Note: Parameters are calculated based on FY18 earnings and Current Market Price of Shares on 21.08.2018.

Recommendation on Marshall Machines IPO:

Review and Recommendation of Marshall Machines Limited IPO from IZ team is:6/10 [ The company has a good product line of CNC lathes with a lot of patents and will be doing expansion of the existing plant with IPO proceeds. The Valuations in terms of P/E, P/B, and M.cap/Sales looks reasonable as compared to its peers. The recent listing of Macpower CNC has given excellent returns] 1-5: Fair 5-7: Good 7-10: Excellent.

Lead Manager of Marshall Machines IPO:

  1. Sarthi Capital Advisors Private Limited

Registrar of Marshall Machines IPO:

  1. Bigshare Services Private Limited

Company Address:

Marshall Machines Limited H.O & Works: C-86, Phase-V, Focal Point, Ludhiana-141 010 (India). Phone No. : +91-161-5012406, 5012407, 5019648. Fax No. +91-161-5012408. Website www.marshallcnc.com

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

Bid Details of Marshall Machines IPO as on
30-Aug-2018 17:30:00 IST

Category No.of shares offered No. of shares bid
1,927,500 6,072,000
1,927,500 2,202,000
198,000 198,000
4,053,000 8,472,000
QIBs Yes
QIBs+HNIs Subscription 3.15X
Retail Subscription 1.14X
Total Subscription 2.15X

Discussion on Marshall Machines IPO:

    *SME deals* –

    11-Sep-2018 MARSHALL Marshall Machines Ltd *KACHOLIA ASHISH* BUY 6,99,000 41.88 –
    11-Sep-2018 MARSHALL Marshall Machines Ltd TRUST FINSTOCK PVT LTD BUY 1,71,000 41.59 –

    The discount listing may be so that these investors can buy more. So the coming days would be quite interesting.

    EW Clover AIF Fund managed by Edelwesis has bought 2,70,000 Shares and our well-known market personality Sh. Ashish Kacholia has bought 4,65,000 Shares in Marshall. So its give confidence and the company is also good fundamentally.

    Some big players in the market have taken a position in the company. So listing would be very interesting. Stay tuned for more updates.

    Due to street fights going on in the market among different companies it is wise to let go of this issue.

    *ACTION BY MAJOR PLAYERS OF MACHINE TOOLS INDUSTRY AGAINST MALPRACTICE BY MARSHALL MACHINES LIMITED*

    TODAY MAJOR PLAYERS OF MACHINE TOOLS INDUSTRY OF INDIA VIZ. ACE DESIGNERS, GALAXY MACHINERY, MACPOWER CNC, JYOTI CNC, J.V.EXPORTS ETC, WHOSE MARKET SHARE IN MACHINE TOOLS INDUSTRY IS AROUND 90% TO 95% IN THEIR SEGMENT, HAS DRAWN ATTENTION OF SEBI, ROC, NSE AND OTHER CONCERN AUTHORITY ON MISLEAD/PARTIAL INFORMATION PUBLISHED IN DRAFT PROSPECTUS AND PROSPECTUS FILED BY MARSHALL MACHINES LIMITED, WHICH AS PER THEM IS PUBLISHED JUST TO GAIN ATTENTION OF OTHERS AND TRY TO DEFAME THE IMAGE OF ALL COMPANIES IN THE MARKET. THEY HAVE HIGHLIGHTED ABOUT THE WRONG INFORMATION MENTIONED IN THEIR PROSPECTUS ABOUT INTERIM ORDER FROM COURT AGAINST THESE MANUFACTURERS TO STOP THE MANUFACTURING OF PARTICULAR MACHINE MODEL, WHICH IN ACTUAL HAS NOT HAPPENED. THEY HAVE ALSO HIGHLIGHTED THE FALSE AND NEGATIVE INFORMATION BEING CIRCULATED IN SOCIAL MEDIA PROBABLY BY MARSHALL, TO INVESTORS, TO GET THE IMPROPER ADVANTAGE IN THE IPO. ALL MANUFACTURERS ARE STRART INVOLVING THEIR LAWYERS AND THINKING TO TAKE LEGAL ACTION AGAINST THIS MALPRACTICE BY MARSHALL MACHINES LIMITED.

      If this is true SEBI should cancel the issue.
      I think if wrong information in prospectus would mean cancellation of issue

    Adding Vedio is very much helpful to investors in decision making regarding company. Thanks….

    **************Peer Comparison****************
    a) Marshal Machines( FY18 Financials)

    1. Revenue= 59.42 Cr
    2. PAT= 5 Cr
    3. Debt(long term + Short Term)= 23 Cr
    4. EBITDA Margins= 21.66%
    5. D/E=1.35
    6. M.Cap= 61 Cr.
    7 .P/E= 12.24

    b) CNC Machines( As on FY18)[ SME Company]
    1. Revenue= 107 Cr
    2. PAT= 7 Cr
    3. Debt(long term + Short Term)= 24 Lacs
    4. EBITDA Margins= 11.49%
    5. D/E=0.005( Debt free).
    6. M.Cap= 204 Cr.
    7.P/E= 29.27

    c) Lokesh Machine Limited( As on FY18)[ Mainline Company]
    1. Revenue= 175 Cr
    2. PAT= 4 Cr
    3. Debt(long term + Short Term)= 72.39 Cr
    4. EBITDA Margins= 16%
    5. D/E=0.52.
    6. M.Cap= 98.45 Cr.
    7.P/E= 21

    Conclusion: The Marshall Machines looks attractively priced at P/E of 12.

    (EPS Story before the Issue) As on FY18
    1. PAT= 5 Cr
    2. No. of Oustanding Shares= 1.068 Cr
    3. EPS=4.68

    (EPS Story after the Issue)
    1. PAT= 5 Cr
    2. No. of Oustanding Shares= 1.455Cr
    3. EPS=3.43
    Conclusion: The issue is priced at P/E of 12.24.

    After the issue, promoters will hold 73.4% of shareholding in the company.

    The Company is one of the biggest CNC machines manufacturing hub in North India having 97000 sq. feet of the manufacturing facility in Ludhiana and has a technology center in Gurgaon. The Company has a good brand name in North India. Out of the total 17 Cr raised from the proceeds of the IPO, 13.82 CR will be spent on the expansion of the existing facility by adding new imported machines and fabrication of mother machinery in-house.

    The Component used in the manufacturing of CNC lathes constitute 67% of the ” cost of material consumed” to the “net revenue” from operations”in FY18.