Pritika Engineering Components Limited IPO

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 i. The Company was incorporated as ‘Pritika Engineering Components Private Limited’ as a private limited company on 20th February 2018. Later, the name was changed to ‘Pritika Engineering Components Limited’, as it became a public Limited on 21st April, 2022.

ii.  Pritika Engineering components cater to the tractor industry in the automotive sector with major dependency on Original Equipment Manufacturers. They supply products directly to OEM and through the promoter company Pritika Auto Industries Limited and group company Pritika Industries Limited.

iii.  We are engaged in the business of manufacturing precision machined components primarily for the automotive industry, especially for tractors, trucks, and other commercial vehicles, etc.

iv. Machined components that the company manufactures are End Cover, Cover Sealed Brake, Differential Case, Cover Hydraulic Lift, Cover Transcase, Front Wheel hub, Fly Wheel Housing, Rear Axle Casings, Hydraulic Lift Covers, Brake Housing & Front Engine Supports, etc.

 v. The company was previously listed on Calcutta Stock Exchange and the same was directly listed on the Bombay Stock Exchange dated October 1st, 2015. The company intended to get directly listed on the National Stock Exchange of India Limited through Direct Listing, and received its listing approval dated August 10, 2021.

vi. Manufacturing Unit of the company is located in Punjab. The company’s clients include Ashok Leyland, Eicher, Mahindra, Tafe, and Swaraj among others.

vii. Our total revenue for 2021-22 is ₹ 5,739.58 lacs with a healthy EBITDA margin of 17.65%. The profit after-tax margin is 9.52%. The EBITDA Margin for FY21 & FY20 remained consistently healthy at 10.88% & 12.09% respectively.

Competitive Strength:

  • Quality Standard
  • Experienced And Professional Management team.
  • Strong and Experiences R&D team.
  • Wide Product Range and Product Segment.

 

Objects of the Pritika Engineering Components Limited IPO:

The Company proposes to utilize the funds which are being raised through this Issue ("Net Proceeds") towards the following object: a) Investment in relation to the new unit set up by the wholly owned subsidiary, Meeta Castings Limited (MCL); b) General Corporate purposes

Pritika Engineering Components Limited IPO Details:

Open Date: Nov 25 2022
Close Date: Nov 30 2022
Total Shares: 3,248,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue
Issue Size: 9.42 Cr.
Lot Size: 4000 Shares
Issue Price: ₹ 29 Per Equity Share
Listing At: NSE Emerge
Listing Date: Dec 08 2022

Promoters And Management:

Mr. Harpreet Singh Nibber aged 50 years, is a graduate in Mechanical Engineering having more than 26 years of experience in the industry. He is the Managing Director of our company. He has completed his B. Tech in 1994 and joined a leading Tractor Manufacturer of India in their manufacturing Engineering Department for two years and gained experience in field of Manufacturing & CNC Machining. In 1996, he joined the family business commencing work with Marketing Department of Pritika Group. Mr. Raminder Singh Nibber, aged 81 years, is a Mechanical Engineer. He graduated from the University of Roorke with a Gold Medal in Metallurgy. He has more than 54 years of rich experience in the industry. He has been awarded Udyog Patra for Self-Made entrepreneur by the Institute of Trade and Industrial Development, Delhi in July, 2003 and Star of the Asia Award by Economic Growth Society of India in the year 2015. He has also been awarded with excellence in Quality Award by Department of Industries & Commerce, Govt. of Punjab. Mr. Ajay Kumar, aged about 48 years, possesses the degree of Mechanical Engineering and MBA in Finance. He is a graduate in Mechanical Engineering from Thapar Institute of Engineering & Technology, Patiala and completed his MBA from Punjab University, Chandigarh. He is an approved Internal Auditor for ISO.

Financials of Pritika Engineering Components Limited IPO:

Particulars (in Lakhs) FY2022 FY2021 FY2020
Revenue 5,740 3,244 2,172
Cost of Material Consumed 3,473 2,045 1,280
EBITDA 1,013 353 263
OPM 17.65% 10.88% 12.09%
Finance cost 219.34 190.53 169.59
Depreciation & Amortisation 206 104 78
PBT 587 58 15
PAT 546 38 14
NPM 9.52% 1.18% 0.63%
No. of shares 111 111 111
EPS 3.59 0.34 0.12

Comparison With Peers:

Peer Comparison:
Name Of the Company Revenue (cr) Profit (cr) EPS P/E CPM MCap (cr)
Nelcast Limited 927 14 1.63 25.8 85 741
Bhagwati Autocast Limited 112 -1 -3.33 30.4 251 72.3
Pritika Engineering Component Limited 57 5 3.59 8.07 29 32.2

Recommendation on Pritika Engineering Components Limited IPO:

Review and Recommendation of Pritika Engineering Components SME IPO by InvestorZone Team 4/10

1. Company is engaged in the business of manufacturing of precision machined components primarily for automotive industry, especially for tractors, trucks, and other commercial vehicles, etc.

2. They supply tractors component directly to OEMs. They make End Cover, Cover Sealed Brake, Differential Case, Cover Hydraulic Lift, Cover Transcase, Front Wheel hub, Fly Wheel Housing, Rear Axle Casings, Hydraulic Lift Covers, Brake Housing & Front Engine Supports.

3.  They have a manufacturing unit in Hoshiarpur Punjab. Company currently have 134 Permanent Employees and 254 Temporary Employees. 4. The company will utilize the funds received from IPO for setting up new unit. 5. As on 31.03.2022, debt on Books is ~25 Crores and Net-Worth is ~16 Crores. So, D/E is slightly over 1. 6. Revenue has grown from 21 Crores in Fy20 to 57 Crores in Fy22. PAT has also increased from 14 Lacs in Fy21 to 5.87 Crores in Fy22. 7.  PAT in Fy22 is ~4 Crores and Net-worth Post IPO would be ~23 Crores. So, RONW would be 18%. Looks decent. 8. In the last 3 years total cash generated from operations is 3.92 Crores and total CAPEX done is ~25 Crores. So, company is not generating any free cash. Mostly the CAPEX is done via Long term debt. Total long term Debt raised in the last 3 years is ~12 Crores. 9. Total Outstanding Shares after IPO would be ~1.1134 Crores. EPS based on this would be 3.59x and P/E of 8x at the Issue price looks fully priced in. 10. Pritika Auto Industries Ltd is a holding company of Pritika Engineering Components which is listed on NSE and BSE. And, currently trading at P/E of 10x  

Lead Manager of Pritika Engineering Components Limited IPO:

  1. GYR CAPITAL ADVISORS PRIVATE LIMITED

Registrar of Pritika Engineering Components Limited IPO:

  1. Satellite Corporate Services Private Limited

Company Address:

Pritika Engineering Components Limited Plot No. C-94, Phase-VII Industrial Focal Point, S.A.S Nagar, Mohali, Punjab 160055 Phone: +91 9878723399 Email: compliance.pecl@pritikagroup.com Websitehttp://www.pritikaengineering.com/index.html

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