TLDR;
The Sunday Investing team reviews several upcoming IPOs, including SME and mainboard listings. They emphasize this is not financial advice, but rather a discussion for educational purposes. They cover Anondita Healthcare, Classic Electrode, Current Infra, NIS Facility Management, Sattva Engineering (all SMEs), Vikran Engineering, and Anlon Healthcare (mainboard). The team discusses financials, growth potential, risks, and whether they plan to apply, providing insights into their decision-making process.
- Anondita Healthcare: Good story, investors, growth, niche sector, undervalued vs peers.
- Current Infra: Good business, good promoter, but late to the solar theme.
- Vikran Engineering: Good company, but working capital mismatch and other concerns.
Opening Remarks [0:00]
Manish from Sunday Investing introduces the show, "Primary Market Chatter," and apologizes for missing previous episodes due to the overwhelming number of IPOs. The team will review five companies: Vikran Engineering (mainboard), Anondita Healthcare, Classic Electrode, Current Infra, and Sattva Engineering (all SMEs). He clarifies that they are not SEBI registered research analysts and this is not financial advice, but rather an educational discussion. He encourages viewers to do their own due diligence and subscribe to the YouTube channel for company reviews. Manish also thanks everyone who interacted with them at Alpha Ideas.
Anondita Healthcare (SME) [5:16]
Rohit reviews Anondita Healthcare, a manufacturer of male condoms sold under the Cobra brand and through white labeling. A significant portion of their business (35 cr) is with government agencies via white labeling, while 25 cr comes from their own distribution network. The company is using the IPO funds for capex and working capital. They currently manufacture 560 million condoms annually, operating in two shifts. Rohit notes the company's strong financials, with 77 cr in revenue and a 21% PAT margin, similar to its listed peer, Cupid. He highlights the demand piece as the biggest question, given the competition. Rohit applied full force in this IPO, confident it will list well due to its good story, investors, growth, niche sector, and undervaluation compared to peers.
Classic Electrode (SME) [17:50]
Sachin reviews Classic Electrode, a manufacturer of welding consumables. They operate in two units, with utilization around 65%. The IPO proceeds will be used for working capital, debt repayment, and capex. Sachin points out that the company hasn't grown much despite being in operation since 1997, with most revenue coming from West Bengal. He notes the company is trading at 12-13 times earnings, while mainboard peers trade at 28-30 times. Growth is a big concern.
Current Infra (SME) [22:33]
Yash reviews Current Infra, an infrastructure and renewable energy company focused on EPC projects. They also have diversified into hospitality through leasing a farmhouse property. The company has an order book of 280 crores. The IPO funds will be used to establish a solar power plant and for working capital needs. Yash likes the repeat business from key clients and the optimistic managing director. He suggests to apply, but notes the company is coming late in the solar theme. The company is trading at 15 times FY24 earnings.
NIS Facility Management (SME) [29:57]
Manish reviews NIS Facility Management, a Kolkata-based company engaged in security and facility management. They work with diverse clients like Reliance Retail and HDFC Bank. A significant portion of their business comes from security and housekeeping services, with recent expansion into facility management and CCTV projects. Manish notes the business is consistent but has low PAT margins. He points out the pre-IPO investors are not very well known. The anchor book seems good, which may protect the IPO price. He will be skipping this issue due to other good issues.
Sattva Engineering (SME) [38:21]
Sachin reviews Sattva Engineering, a Chennai-based EPC company specializing in water infrastructure. Their main focus is on underground sewage systems and water treatment plants. They have an order book of around 300 crores. Sachin notes that 95-96% of the revenues is from government contracts. The IPO use 27 cr is for working capital and the rest out of the total issue is for GCP. The company is trading at 15 times trailing earnings and 8-9 times forward earnings. He believes it should perform well.
Vikran Engineering (Mainboard) [46:20]
Tanmay reviews Vikran Engineering, an EPC company working in power T&D, water infrastructure, and railway infrastructure. The company has an order book of 2442 crores. The company is raising 772 crores out of which 721 cr is a fresh issue and 51 cr is an OFS. The company is embarking 541 crores towards the working capital and rest 180 crores as a GCP. He points out several legal cases, increasing trade receivables, deteriorating cash flows, and a significant drop in bid wins. Railways have banned the company for 2 years due to involvement in some illegal gratification. He suggests to wait for the Q2 and Q3 result.
Anlon Heathcare (Mainboard) [1:07:31]
Tanmay reviews Anlon Healthcare, a chemical manufacturer engaged in pharma intermediates and APIs. The company is one of the few manufacturers of laxoprofium sodium dehydrate. He points out increasing trade receivables, poor cash flows, and high customer concentration. The company had a major negative impact due to a road accident of a distributor. He suggests to avoid the IPO and wait for the Q1, Q2 results.
Closing Remarks [1:16:57]
Manish thanks everyone for sticking around and reminds viewers to subscribe to the YouTube channel. The team takes their leave.