Spectrum Electrical Industries Limited IPO
(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.
Objects of the Spectrum Electrical Industries Limited IPO:
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:
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) |
Comparison With Peers:
Recommendation on Spectrum Electrical Industries Limited IPO:
Lead Manager of Spectrum Electrical Industries Limited IPO:
Registrar of Spectrum Electrical Industries Limited IPO:
Company Address:
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:
8 Comments
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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