Precision Metaliks Limited IPO

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(i) The Company was incorporated in the year 2012. The Company’s Promoters are Abhishek Business Private Limited and Jayanthi Roja Ramani. The Company was initially engaged in the Business of Trading of the Metals prior to FY 2018-19. After that, the Company commenced manufacturing activity from FY 2019-20 in the SEZ Unit. The SEZ Unit is situated at Visakhapatnam Special Economic Zone, Duvvada, Visakhapatnam. Under this Unit they carry out the manufacturing activities / process on Semi-finished Wheels by rendering value added services such as cleaning, washing, buffing, polishing, testing and packing.

(ii) Their Major Products / services Following is list of its key products/services.

1. Value added services on alloy wheels

Company converts semifinished / raw wheels to finished wheels by carrying the value added services such as Polishing, Buffing, Testing and Packing for our major client, Synergies Castings Limited, Visakhapatnam. The Company is also planning to offer these services to the USA market through Silver MetalX INC, USA by way of supplying finished Alloy Wheels with accessories to cater to the aftermarket.

2. Automated cleaning of Aluminium chips + briquetting into Ingots

A key advantage of Aluminium is its ability to be recycled. The metal can be processed, used, recycled, re-used multiple times without significant loss of its properties. Thus, used alloy wheel scrap, or alloy wheel chips and filings can be used to make fresh alloy wheel castings. However, given that alloy wheels are high speed critical components, it is most critical that the input material must be extremely clean and devoid of any waste materials, coolant, moisture or iron.

3. Robotic polishing of alloy wheels and
4. Other Engineering Services

(iii) Our Competitive Strengths
a) Cost effective, Precise and Automated Solutions
b) Repeat Customer Orders
c) Strong Professional Team

Objects of the Precision Metaliks Limited IPO:

The objects of the Net Proceeds (as defined below) of the Issue are: 1. Meeting additional Working Capital Requirements, and 2. General Corporate Purpose

Precision Metaliks Limited IPO Details:

Open Date: Jan 19 2022
Close Date: Jan 24 2022
Total Shares: 43,000,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Issue
Issue Size: 21.93 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 51 Per Equity Share
Listing At: NSE Emerge

Promoters And Management:

(i) Jayanthi Roja Ramani, aged 53 years, is a Promoter and Director of the Company. She has been associated with the Company since 2016 and has been designated as Chairman w.e.f. September 01, 2021. She has obtained Master of Commerce degree from Andhra University in 1999 with Banking as special subject. She also holds Master of Business Administration from Andhra University passed in 2001. She has also passed Intermediate examination of ICWAI. She has experience of almost 2 decades in various positions in the fields of accounts and finance viz. finalisation of accounts, handling Internal Audits, handling direct and indirect taxes matter etc. She is the brain behind the financial strength of the Company. She guides the Board of Directors of the Company in all the decisions related to the financial affairs of the business. (ii) Sevvana Venkata Raman Rao, aged 69 years, is an CEO & Whole Time Director of the Company. He has been associated with the Company since September 01, 2021 and has been designated as CEO & Whole Time Director. He is a qualified Commerce graduate (1972) and Bachelor of General Law (1975) from Andhra University. He has also done Masters in Arts in Industrial Relations and Labour Welfare in 1977. He has experience of over 4 decades in human resource management, industrial relations and administration. He is entrusted with the responsibility of looking after the overall management and operations of the Company. He looks after the overall administration of the business with the support of professional executives and reports to the Board of the Company. (iii) Percy Homi Italia, aged 71 years, is an Independent Director of the Company. He is a Qualified Chartered Accountant from the Institute of Chartered Accountants of India. He is having around 45 years of professional experience in the field of Financial Management, Business Management, Taxation, FEMA, Corporate Law matters and advisory services as a practicing Chartered Accountant. He has been appointed on the Board of Directors since April 15, 2021 to comply with Corporate Governance requirements.

Financials of Precision Metaliks Limited IPO:

 
Particulars (in Lakhs) March-21 March-20 Mar 19
Revenue 4,924 2,218 4
Cost of Material Consumed 4,656 2,039 0
Purchase of Stock in Trade 64 7 0
Changes in inventories -1,226 0 0
Employee Benefit Expenses 400 3 0.39
Other Expense 865 80 3
Operating profit 165 88 0
OPM % 3% 4% 0%
Finance Cost 1 0.9 0.02
Depreciation 12 3.64 0.44
Other Income 0.09 0.25 1.2
Profit Before tax 164 88 1.19
Profit After Tax 149 82 0.46
 

Comparison With Peers:

Remsons Industries and UNI Abex Alloys are shown as peers of the company. a) Remson Industries is having Mcap of 142 Crores and P/E of 38x. b) Uni Abex Alloys is having Mcap of 124 Crores and P/E of 10x.

Recommendation on Precision Metaliks Limited IPO:

Review and Recommendation of Precision Metaliks Limited IPO by InvestorZone is 3/10 1. Nothing very exciting in the business model of the company. It was a trading company till 2018 and after that they have setup a manufacturing plant in SEZ, Andhra Pradesh. 2. They have only one major client to which most of the business is done by the company. 3. Asking P/E is 55x which looks high as compared to peers as mentioned in the DRHP. 4. Precision Metaliks is not able to generate cash from the operations as they have high receivables. That is being fuelled by issue of shares. However, company is debt free. 5. In March 2021, they have issued shares at Rs.140 per share and then bonus were issued in 39:1...So, per share value comes out to be 3.58 per share.

Lead Manager of Precision Metaliks Limited IPO:

  1. First Overseas Capital Limited

Registrar of Precision Metaliks Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Precision Metaliks Limited 6-3-855/10/A, Flat No. 4A, Sampathji Apartments Saadat Manzil, Ameerpet, Hyderabad-500016 Phone: 91 891 4884132 Email: cs@precision-metaliks.com Websitehttp://www.precision-metaliks.com/

Discussion on Precision Metaliks Limited IPO:

1 Comment

    Total Shares Outstanding before IPO = 1,19,59,066
    Total Shares to be issued in IPO = 43,00,000
    Total Outstanding after IPO = 1.6529 Cr

    Issue Price = 51 per share…

    Mcap = 84 Crores

    PAT = 1.50 Cr

    EPS = 0.90

    P/E = 56x (Looks very costly)

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