Pavna Industries IPO

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They are engaged in manufacturing of wide range of automotive components for reputed Original Equipment Manufacturers (OEMs) as per their requirements primarily catering to various vehicle segments, including, passenger vehicles, two-wheelers, three-wheelers, heavy and light commercial vehicles and off-road vehicles. Our Company has a varied client base and we are committed to continuing to diversify our product offerings, customer base and geographical footprint, thereby minimizing our exposure to individual geographies and industry sectors.

The Company along with its subsidiaries has a diversified product portfolio, which consists of high-quality reliable parts such as Ignition Switches, Fuel Tank Caps, Latches, Auto Locks, Handles, Switches, Oil Pump, Carburetor, Throttle Body, Fuel Cocks, Injection System, Casting Components etc. They also provide aftermarket sales and services. The aftermarket products include products manufactured by us such as filters, clutch plates, bearings, wiper blades and brake shoes.

They have ultra modern manufacturing plants in India, located in Aligarh (Uttar Pradesh), Aurangabad (Maharashtra), & Pantnagar (Uttarakhand). The facilities are located in key auto-clusters and some of the facilities are in close proximity to the plants of the OEM customers.

They undertake research and development with a focus on technologically advanced products, innovation, enhancing the products portfolio, improving the quality of the products and the manufacturing processes both independently and through cooperation with the customers. The research and development capabilities are a result of a combination of the technological knowledge of the joint venture partners and technical collaborators, and those that they have internally developed. They have entered into joint ventures and technical collaboration with Sunworld Moto Industrial Co.

As on March 31, 2020, our company had a total work force of 737 full-time employees (other than Directors) (including skilled, semi skilled and unskilled employees).

Objects of the Pavna Industries IPO:

The IPO is mix of Fresh shares and OFS. a) OFS = 14.81 Crores b) Fresh Issue = 14.89 Crores The fresh issue will be used for the following purposes; 1. To make partial repayment of loans. 2. To meet general corporate purposes.

Pavna Industries IPO Details:

Open Date: Feb 24 2021
Close Date: Mar 01 2021
Total Shares: 1,800,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed issue
Issue Size: 29.70 Cr.
Lot Size: 800 Shares
Issue Price: ₹ 165 Per Equity Share
Listing At: NSE Emerge
Listing Date: Feb 09 2021

Promoters And Management:

The Founder of the Company Mr. Pawan Jain and the Managing Director and Promoters of the Company Mr. Swapnil Jain and Mrs. Asha Jain have substantial 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 Pavna Industries IPO:

Particulars(cr) 6MFY21 Mar-20 Mar-19 Mar-18
Sales 5,166.82 13,620.11 13,787.66 10,663.08
Purchase of materials 3,538.41 8,987.57 9,629.27 7,583.84
Changes in Inventories -198.48 -847.06 -198.22 -34.97
Employee Benefit Expenses 596.12 1,637.85 928.47 543.64
Other expenses 826.23 2,369.33 2,228.99 1,698.52
Operating Profit 409.35 1,483.53 1,209.41 886.62
OPM % 7.92% 10.89% 8.77% 8.31%
Other Income 4.81 11.11 10.25 14.56
Interest 209.47 321.32 162.75 190.21
Depreciation 154.20 415.88 250.73 206.61
Profit before tax 79.92 612.51 795.93 489.8
Net Profit 27.13 408.45 586.13 324.23
No. of shares 60.90 60.90 60.90 60.90
EPS in Rs 0.45 6.71 9.62 5.32

Comparison With Peers:

There is no listed business which can be compared with Pavna Industries strictly.

Recommendation on Pavna Industries IPO:

The IPO is priced at high P/E of 23x based on three years average EPS of FY18,19 and 20. Plus Covid-19 has impacted the business very badly.

Lead Manager of Pavna Industries IPO:

  1. Aryaman Financial Services Limited

Registrar of Pavna Industries IPO:

  1. Link Intime India Private Limited

Discussion on Pavna Industries IPO: