Spectrum Electrical Industries Limited IPO

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(i) Spectrum Electrical Industries Limited incorporating as a proprietary firm, in 1995 in Jalgaon, Maharashtra. The Company is an ISO 9001:2015 certified company, engaged in the business of designing and manufacturing of electrical, automobile and irrigation components as contract manufacturers and as a component suppliers to leading industry players on Business-to-Business (B2B) model.

(ii) The Company focus has been on providing one-stop-shop solutions mainly to manufacturers of electrical products and components in India. The Company offers integrated design and manufacturing solutions for local and internationally recognized brands in the electrical products industry. We have developed ability to manufacture most of these products from the concept and design stage up to the final delivery to the customer’s distribution network thereby covering the entire value chain.

(iii) The Company offers end-to-end product solutions to our customers under the B2B model wherein we provide services ranging from global sourcing, manufacturing, quality testing and packaging to logistics. The company also offer products in the intermediate stages to many of our customers. Over last two decades, we have gained invaluable experience in assisting our customers to develop new designs, incorporating latest technologies and efficiently utilizing our manufacturing facilities, equipment, and materials and thereby constantly improving our product offerings, structure, and functional design so as to meet our customers’ needs.

(iv) The Company undertakes manufacture and supply of finished products and intermediate-stage products for our customers on a contract basis depending upon the demand from them. Our manufacturing unit(s) are located at Jalgaon & Nashik in Maharashtra. We also have a commercial tool room with modern infrastructure backed by an experienced team. We offer comprehensive design services, ranging from product conceptualization, designing, technical detailing, tooling and productivity improvement services resulting in improved manufacturing processes for our customers’ products.

Spectrum Electrical Industries Limited IPO Stock Quote & Charts

60.00

0.00%

  • Open: 60.00
  • High - Low: 60.00 - 60.00
  • Previous Close: 60.00
  • Total Traded Volume: 2000
  • Updated On: 05-Dec-2018

Objects of the Spectrum Electrical Industries Limited IPO:

Objective of Spectrum Electrical Industries Limited IPO are: (A) To set up a Zinc Plating plant at Umale (B) To meet long-term working capital requirements (C) General Corporate Purposes (D) Issue Expenses Out of total proceed of 25.87 Cr from the Issue the company will utilize closed to 7.56 Cr for setting up the Zinc Plating Plant.

Spectrum Electrical Industries Limited IPO Details:

Open Date: Sep 17 2018
Close Date: Sep 21 2018
Total Shares: 3,980,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue IPO
Issue Size: 25.87 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 65 Per Equity Share
Listing At: NSE Emerge
Listing Date: Oct 01 2018

Promoters And Management:

Promoters of Spectrum Electrical Industries Limited Company are: Mr. Deepak Chaudhari, Promoter and Managing Director of the Company. He is a Bachelor of Engineering in Electronics (BE Electronics) from Dr. Babasaheb Ambedkar Marathwada University, Aurangabad and has an experience of over 23 years in manufacturing electrical components and other allied products. Mr. Deepak Chaudhari looks after the day-to-day management of the Company under the supervision, direction, and control of the Board of Directors. He is the guiding force behind the strategic decisions of our Company and oversees the principal business activities of our Company including planning & formulating the overall business strategy and developing business relations for our Company. His engineering background combined with his sharp business acumen has been instrumental in the growth of our Company. His passion for manufacturing quality products has enabled our Company to gain trust and appreciation of the customers for our products.

Financials of Spectrum Electrical Industries Limited IPO:

Particulars For the year/period ended (in Rs Lacs)
31-Mar-2018 31-Mar-17 31-Mar-16 31-Mar-15 31-Mar-14
Total Assets 10,763.34 2,506.00 1,491.32 490.27 89.93
Total Revenue 11,983.24 659.77 215.88 13.90 --
Profit After Tax 590.32 53.27 30.03 1.73 (5.39)
Note: The FY18 topline and bottom-line look quite inflated that is due to the merging of the running business of 4 group entities viz. 1) Spectrum Fabricators (India) Pvt. Ltd. 2. (SFIPL); M/s. Spectrum Electroplaters, Jalgaon. 3) M/s. Spectrum Electroplater, Nasik. 4.) M/s. Spectrum Polytech, Jalgaon. Due to this business integration, the financial results of FY 2017-18 are significantly different from other past periods and are not comparable.

Comparison With Peers:

There are no strictly comparable listed companies engaged in the same line of business as that of the Company. In view of this, comparison of financial data with listed industry peers is not possible.

Recommendation on Spectrum Electrical Industries Limited IPO:

Review and Recommendation of Spectrum Electrical Industries Limited IPO from IZ team is: 4/10 [ The company has done reasonable pricing based on P/E, EV/EBITDA, and M.cap/Sales. However, as 4 group entities merged this year into the company so growth can't be judged based on previous year results]

Lead Manager of Spectrum Electrical Industries Limited IPO:

  1. Arihant Capital Markets Limited

Registrar of Spectrum Electrical Industries Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Spectrum Electrical Industries Limited Plot No. V -195, MIDC Area, Ajanta Road, Jalgaon- 425 003, Maharashtra Phone No. 0257 2210 192 website: www.spectrum-india.com E-mail: sarita.zamwar@spectrum-india.com

Bid Details of Spectrum Electrical Industries Limited IPO as on
21-Sep-2018 18:00:01 IST

Category No.of shares offered No. of shares bid
1,890,000 3,756,000
1,890,000 1,052,000
200,000 200,000
3,980,000 5,008,000
QIBs No
QIBs+HNIs Subscription 1.99X
Retail Subscription 0.56X
Total Subscription 1.27X

Discussion on Spectrum Electrical Industries Limited IPO:

    The track record of Lead manager is not good at all.
    If a lead manager cant show good performance of its 1st SME. in this case Nitiraj engineer is ruling at half the issue price and never in lifetime it was able to cross issue price
    i would simply avoid in such issue .

    Return Ratios( ROE and ROCE)—- Both these parameters are the Most important aspect of any business as it shows the amount of return the company is earning on its asset or capital employed.

    FY18
    (i) ROE= 17%
    (ii) ROCE= 24%.

    FY17
    (i) ROE= 9.16%
    (ii) ROCE= 6%.

    Conclusion- The Company has excellent Return ratios in FY18 as compared to FY17. However, as 4 entities merged this year resulting in excellent return ratios will remain same in future is still questionable.

    Valuation based upon Earnings( P/E, M.cap/Sales, EV/EBITDA)

    (i) Mcap-98cr
    (ii) Debt= 34.44 Cr
    (iii) Cash=5.01 Cr
    (iv) EV= 127.43 Cr
    (v) EBITDA= 16.5 Cr
    (vi) Sales= 119.8 Cr
    (vii) EPS= 3.90

    Calculation of Valuation Parameters

    (i) EV/EBITDA= 7.72
    (ii) M.Cap/Sales= .82
    (iii) P/E= 16.67

    Conclusion- The company Valuations in terms of EV/EBITDA, M.cap/Sales, and P/E is reasonable.

    Debt Story as on FY18

    (i) Long-term Debt= 18.18 Cr
    (ii) Short-term Debt = 16.26 Cr
    (iii) Equity= 33.73 Cr
    (iv) D/E= 1.02( Manageable).

    EPS Story based on FY18 Earnings

    (i) PAT= 5.90 Cr
    (ii) Outstanding Shares= 1.511984 Cr
    (iii) EPS= 3.90
    (iv) P/E= 16.67

    The company took over the running business of group entities viz.

    1) Spectrum Fabricators (India) Pvt. Ltd.
    2. (SFIPL); M/s. Spectrum Electroplaters, Jalgaon.
    3) M/s. Spectrum Electroplater, Nasik.
    4.) M/s. Spectrum Polytech, Jalgaon.

    Due to this business integration, the financial results of FY 2017-18 are significantly different from other past periods and are not comparable.

    The top three clients of the company are :

    1. Novateur Electricals and Digital Systems Pvt. Ltd. (part of Legrand SA, France)
    2. Anchor Electricals Pvt. Ltd.
    3. Schneider Electric India Private Limited.

    In the aggregate, these three customers accounted for more than 75% of the revenue from operations (net) for the financial year ended March 31, 2018.

    They manufacture a range of products under the electrical components domain having different applications and utilities.

    They undertake activities such as designing, fabrication, molding, powder coating, electroplating and assembling to develop these products. Some of the products are obtained after passing through all the stages of production while some are obtained at intermediate stages of production.

    The key products include the following:
    1. Distribution Board/Metal Junction Box
    2. AC Box
    3. Modular Electric Board Panels
    4. Mini MCB Base & Cover
    5. Fancy Angle Holders
    6. Oher electrical components and electroplating services