TLDR;
Namaste! This video by Sunday Investing gives a rundown of four IPOs coming up this week: Avana Electrosystems and Indo SMC (both SMEs), Amagi (Mainboard), and Bharat Coking Coal Ltd (Mainboard). The analysts discuss the companies' businesses, financials, growth potential, and whether they'd apply for the IPOs.
- Avana Electrosystems: Manufacturing customized control and relay panels.
- Indo SMC: Engaged in the design and manufacture of diversified range of products catering to electrical industrial infrastructure applications.
- Amagi: Cloud-based broadcast and connected TV technology company.
- Bharat Coking Coal Ltd: Production of cooking coal, non-cooking coal and washed coal.
Opening Remarks [0:00]
The host welcomes viewers to the IPO discussion, mentioning they skipped last week due to a lack of mainboard IPOs and a shaky market. He acknowledges the current market difficulties and hopes for improvement, emphasizing that it's a stock picker's market with opportunities to be found. They'll be covering two mainboard IPOs (Bharat Cooking Coal and Amagi) and two SME IPOs (Avana and Indo). A disclaimer is given that they are not SEBI registered analysts and viewers should do their own due diligence.
Avana Electrosystems (SME) [2:41]
Avana Electro Systems, incorporated in 2010 and based in Bangalore, manufactures customized control and relay panels ranging from 11kW to 220kW for power systems monitoring. The IPO is a ₹35 crore issue, with ₹30 crore being a fresh issue and ₹5 crore an OFS (Offer For Sale), valuing the company at ₹134 crore. The company's revenue is ₹63 crore with ₹8 crore PAT. The company was started by a group of four people with prior experience in the control and relay panel business. They supply to private discoms and transmission/distribution companies. Their products include protection relays and automation systems for substations and transmission lines. They source orders pan-India, with 80% of revenue from private players and the rest from government discoms. They plan to expand into railways in the future. The IPO funds will be used for capacity expansion. The IPO is priced at around 13 times FI26 earnings. Serene is underwriting 85% of the issue. The anchor book was decent.
Indo SMC (SME) [13:04]
Indo SMC, incorporated in 2021, designs and manufactures products for electrical, industrial, and infrastructure applications, including enclosed boxes for energy meters and distribution boxes. The IPO is a ₹92 crore fresh issue, valuing the company at ₹341 crore. FI25 financials show ₹139 crore revenue and ₹15.5 crore profit. The company started with SMC (sheet molding compound) products and expanded into FRP (fiber reinforced polymers) and current/potential transformers. SMC is the largest segment. They have four manufacturing facilities across three states. They work with major discoms, leading to high customer concentration. The company has grown rapidly since 2021, with consistent EBITDA and PAT margins. They expect to double revenue this year. Funds are mainly for capacity addition. They plan to enter the railways and defense sectors. The promoter is also associated with Accent Microcell. The anchor book was decent, with Bengal Finance as the largest anchor investor.
Amagi (Mainboard) [26:27]
Amagi, incorporated in 2008, is a cloud-based broadcast and connected TV technology company providing end-to-end solutions for content creation, distribution, and monetization. The IPO is ₹1,800 crore, with ₹816 crore fresh issue and the rest OFS, valuing the company at ₹7,810 crore. FI25 revenue is ₹1223 crore, but the company is currently loss-making due to ESOPs. Amagi enables content providers to stream video content over the internet. Clients include Lionsgate, Vivo, Sinclair, Fox, Sony, Roku TV, and Warner Music. The company derives most of its revenue from the Americas and Europe. Amagi supports every stage of the video content lifecycle, from production to monetization. The company has three business models: streaming unification, cloud modernization, and monetization/marketplace. The fresh issue proceeds will be used for technology and cloud infrastructure development and acquisitions. The company is the largest cloud-native software solution provider in terms of revenue. The company is coming at 26-27 times FI27 EV/EBITDA. The anchor book was decent, with SBI Mutual Fund, HDFC, and Fidelity participating.
Bharat Coking Coal Ltd (Mainboard) [43:01]
Bharat Coking Coal Limited (BCCL), incorporated in 1972, is India's largest producer of coking coal, a subsidiary of Coal India Limited. The IPO is ₹171 crore, entirely an OFS. The market cap is ₹10,700 crore. Revenue is ₹14,400 crore and profit is ₹1240 crore. BCCL produces various grades of coking coal, non-coking coal, and washed coals, primarily for the power sector. Clients include NTPC and Damodar Valley Corporation. Indian coking coal is considered inferior globally due to its high ash content. BCCL has a washing capacity of 3.5 million MTPA and plans to double it by FY28. The company's coking coal has a high ash content, making it suitable for the power sector but not the steel sector. The biggest consumer of coking coal globally is the Chinese steel sector, which is currently experiencing a slowdown. The company is looking to increase its wallet share towards the steel sector. The company has reserves for the next 90 years. The management expects the market share of domestic coking coal production to fall. The company deserves a 25-35% upside in the short to medium term, but it should correct post-listing.
Closing Remarks [1:03:17]
The host concludes the episode, reminding viewers to follow the Sunday Investing channel for updates and future IPO reviews. He thanks everyone for joining.
