Shera Energy Limited IPO

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i. Shera Energy is primarily engaged in the business of manufacturing of winding wires and strips made of non-ferrous metals primarily Copper and Aluminium. Company also manufactures wire rods, wires and tubes of Copper and Brass. These wires, tubes and rods are manufactured in various shapes and sizes as per the requirement of the customers and / or demand in the market. The product range includes paper covered wires, enamel and fibre covered wires, round wires, rectangular wires, bunched wires, tubes, rods, strips, etc.

ii. The Company has also commenced manufacturing special grade brass rods through Cold Extrusion process suitable to make bullet shells for defence applications. Company has successfully done the
requisite trials and tests on this with customers. This product has been recently developed by the company on account of demand in the ammunition industry in the country.

iii. Over the past couple of years, the company has outgrown itself into a distinguished large-scale organization specializing in wires, tubes and rods of various shapes, sizes and in various on-ferrous metals having plentiful applications. The experience of more than a decade has enabled it to build an effective business model that gives us control over the processes from raw material procurement,
manufacturing and marketing to sales through its network.

iv. The company has well-equipped manufacturing facilities with latest technology plant and machinery for manufacturing and quality control lab with in house testing equipments to test the quality of its
products. Their finished products undergo a strict quality check to ensure that they are of required quality as per the standards set. Their in-house testing team regulates and monitors the quality, safety
and packaging of the products.

v. In order to expand the business and to get the benefits of backward and forward integration, the company has invested/acquired/incorporated three subsidiary companies namely, Rajputana
Industries Private Limited, Shera Metal Private Limited and Shera Infrapower Private Limited to add value added products to its existing portfolio.

Competitive Strengths
i. Strong, experienced and dedicated senior management team and qualified workforce
ii. Long standing relationships with leading clientele
iii. Focus on Quality and Safety

Objects of the Shera Energy Limited IPO:

The Offer comprises the Fresh Issue by the Company and an Offer for Sale by the Selling Shareholders. The Company proposes to utilise the Net Proceeds of the Fresh Issue towards funding of the following objects: • Funding the Working capital requirements of the Company; and • General corporate purposes.

Shera Energy Limited IPO Details:

Open Date: Feb 07 2023
Close Date: Feb 09 2023
Total Shares: 6,176,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 35.2 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 55-57 Per Equity Share
Listing At: NSE Emerge
Listing Date: Feb 17 2023

Promoters And Management:

i. Sheikh Naseem is the Chairman and Managing Director of the Company. He is a merit holder of Bachelor’s of Engineering (Hons.), Electrical, from Pt. Ravishankar Shukla University, Raipur (M.P.). A man groomed up with its successful technological insights in troubleshooting of various mechanical issues. He has over 23 years of experience in various sectors including metal industry. He started a small unit of manufacturing of Transformers in the name and style “Shivani Electrical” at Ratangarh in 1998. His clear acumen towards machinery and technology inspired him to constantly work of innovate in Electrical Wire Industry and Non-Ferrous Metal and Alloy Metal Industry business rather than joining any lucrative carrier opportunity with some leading corporate. In 2002, he shifted to Jaipur and started a Proprietorship Firm in the name and style “Shera Metals and Engineers”. He thereafter floated Private Limited Company in Year 2009 in the name of Shera Energy Private Limited and all the business and movable assets of Shera Metals and Engineers is taken over by Shera Energy Limited via Slump Sale Agreement. ii. Shivani Sheikh is the Whole-Time Director of the Company. She holds a Bachelor’s of Engineering, Electrical, Honours degree from Ravishankar Shukla University, Raipur (M.P.). She has over 23 years of experience in various sectors including metal industry. After studies, she started Partnership firm naming M/s Shivani Electrical in 1998 and further established her own Proprietorship firm with the name M/s S.S. Structure in Jaipur in January, 2008. Exceptionally talented in overseeing the planning of group finance and hedging strategic management. She is wife of Mr. Sheikh Naseem and is actively engaged in the operations of the business. The essence of quality is closely wrapped in the way she thinks, plans and works. Her professional attitude has led her company Shera Energy Limited to climb the ladders of success in no time. She is the perfect bend of professionalism and perfectionism. She connects well with the employees and acts as a bridge between employees and management of the company. iii. Piyush Sharma is a Non-Executive Director of the Company. He completed his Master of Business Administration, from Pacific Institute of Management, Udaipur, Rajasthan. He is appointed as a Director-Marketing in Shera Metal Private Limited since 2012. He has experience of 10 years in the field of marketing and sales. He has been with the Shera Energy Limited since 2013.  

Financials of Shera Energy Limited IPO:

Particulars ( In Crore) 2022 2021 2020
Revenue from Operation 524 422 425
Cost of Material Consumed 493 403 387
Change in Inventories -27 -33 -15
Employees Benefit Expenses 7 6 8
Other Expenses 17 14 16
EBITDA 34 32 29
OPM% 6.49% 7.58% 6.82%
Other Income 1 1 1
Depreciation 5 5 4
Finance Cost 20 21 20
PBT 10 7 6
Tax 3 2 2
PAT 7 5 4
No. of Shares 1.99 1.99 1.99
EPS 3.5 2.5 2.0

Comparison With Peers:

Name of the Companies Revenue (Cr) Profit(Cr) EPS P/E CMP MCap (Cr)
Shera Energy Limited 524 7 3.5 16.20 57 113.4
Precision Wires India Limited 2,683 63 3.63 17.1 67 1,161
Rajnandani Metal Limited 1,028 10 0.36 28.2 13.8 382
RamRatan Wires 2,289 54 11.86 14 159 700
Bhagyanagar India limited 1,574 11 3.46 27.6 48.6 155
   

Recommendation on Shera Energy Limited IPO:

Review and Recommendation of Shera Energy by IZ team is 4/10 1. Shera Energy Limited is primarily engaged in the business of manufacturing winding wires and strips made of non-ferrous metals primarily Copper and Aluminium and the Company also manufactures wire rods, wires and tubes of Copper and Brass. 2. These wires, tubes and rods are manufactured in various shapes and sizes as per the requirement of the customers and / or demand in the market and their products include paper, enamel, and fiber-covered wires, circular, rectangular, bunched, tubes, rods, strips, etc. 3. Their company also makes cold-extruded special-grade brass rods for defense bullet shells. & Company has completed customer testing and tests. The company designed their product to meet ammunition industry needs in our country. 4. Over a decade of experience has allowed them to create a successful business strategy that controls their processes from raw material sourcing, manufacturing, marketing, and sales through their network. 5. Their organisation boasts modern manufacturing facilities and a quality control lab with in-house testing equipment to ensure product quality and their testing staff oversees product quality, safety, and packaging. 6. Its company has invested/acquired/incorporated three subsidiary companies—Rajputana Industries Private Limited, Shera Metal Private Limited, and Shera Infrapower Private Limited—to offer value-added items to their portfolio. 7. Competitive strength: i) a strong, experienced, and dedicated senior management team and qualified workforce. ii) Long standing relationships with leading clientele. iii) Focus on Quality and Safety. iv) Established Manufacturing facility. v) Innovative Ideas. 8. Their industry is fragmented with many small and medium-sized enterprises. They face competition from various domestic and international players. They compete with their competition by positioning themselves as a knowledge-based production unit with segment expertise that allows them to produce superior products. Price usually decides. 9. The Revenue has Increased from Rs 426 Crore in FY20 to Rs 524 Crore in FY22. 10. The EBITDA has Increased from 30 Crore in FY20 to 34 Crore in FY22. 11. The PAT has Increased from 3 Crore in FY20 to 6 Lakhs in FY22. 12. As per FY22, CFO/EBITDA is 0.31 and Debtors Days is 50. 13. As per FY22, EPS is 2.65, Market Capitalization is 148 Crore & P/E is 21.46X.

Lead Manager of Shera Energy Limited IPO:

  1. Holani Consultants Private Limited

Registrar of Shera Energy Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

F-269-B, Road No. 13, VKIA, Jaipur Rajasthan 302013 India  

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