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Indian IPOs
>> Porwal Auto Components
Overview of the Porwal Auto Components IPO 13 December 2007 Source: www.keynoteindia.net
Porwal Auto Components Ltd. IPO details: Price Band: Rs. 68 - 75 per share Issue open between: December 17 - 20, 2007 Book Running Lead Managers: Keynote Corporate Services Ltd. To List on: BSE Grading: 3/5 by CARE Market Cap post-listing: Rs. 113Cr or $28.7 million (based on the cap price) Executive Summary: Porwal Auto Components Ltd (PACL), a TS: 16949 accredited company is a manufacturer of SG and Grey Iron castings, primarily catering to needs of the automobile OEMs in India. Its manufacturing facilities are located at Pithampur, Indore and cater to the needs of automobile OEMs like Eicher Motors, Man Force Trucks, Force Motors and L&T Case Equipments. Its location and client relationships act as an entry barrier for other players. PACL’s wide product range includes SG and Grey Iron castings weighing from 0.5 kg to 120 kg, thus making itself a single source supplier for many auto OEMs. In FY05, due to increased demand from clients PACL commenced its expansion of capacity from 4060tpa to 9000tpa. This was funded through a term loan of Rs12Cr, Rs8Cr as preferential allotment to promoters and other strategic investors and Rs2.5Cr as advances received from Eicher Motors Ltd. PACL has successful track record of high capacity utilization (an average of over 90% in last four years) and has successfully expanded its capacity to 9000tpa. The proposed expansion plan is to further expand its capacity to 27,600tpa and to set up a windmill with power generating capacity of 1.5MW, for captive consumption. CARE has assigned Grade 3/5 to the IPO, indicating average fundamentals. According to the recent press reports, Eicher Motors Ltd is entering into a JV with AB Volvo for its commercial vehicles and components business. Volvo would acquire an 8.1% stake in Eicher to give it a 50% stake in the JV. |
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