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Review By Dilip Davda on June 24, 2016
KKV Agro Power Ltd (KKV) is engaged in the business of power generation from renewable energy sources, wind and solar. As on December 31, 2015, KKV’s total portfolio of operating projects included 7 MW of aggregate installed capacity, which comprised of 6.0 MW of wind energy projects and 1.0 MW of solar project. The company is currently in the process of acquiring additional capacity of 0.8 MW of wind energy generators in Tamil Nadu. It operates under “Group Captive Power Scheme” notified under the Electricity Act, 2003 by Ministry of Power, Government of India.
To part finance setting up 0.8 MW Wind Energy Project in TN, Erection of 33 KV Electricity Transmission Line, repayment of Term Loan and raise general corpus fund, the company is coming out with a maiden iPO of 112000 equity share of Rs. 10 each at a fixed price of Rs. 320 per share to mobilize Rs. 3.58 crore. Issue opens for subscription on 30.06.16 and will close on 07.07.16. Minimum application is to be made for 400 shares and in multiples thereon, thereafter. Issue is lead managed by Karvy Investor Services Ltd and SKDC Consultants Ltd is the registrar to the issue. Post allotment, shares will be listed on NSE SME Emerge. After initial contribution at par, it issued fresh equity at a price of Rs. 320 in May 2016. Its current paid up equity capital of Rs. 0.25 crore will stand enhanced to Rs. 0.36 crore post IPO.
On performance front, the company generated revenues of Rs. 1.90 crore, Rs. 2.62 crore and Rs. 3.58 crore in FY13, FY14 and FY 15 respectively with net profits of Rs. 0.37 crore, Rs. 0.64 crore and Rs. 0.46 crore. It has sold 5.4 MU, 4.8 MU and 6.2 MU in FY2013, FY2014 and FY2015 respectively. For nine months ended 31.12.15 it has earned net profit of Rs. 0.56 crore on revenue of Rs. 4.16 crore. If we annualize these earnings and attribute on expanded equity post IPO then the asking price is at a P/E of 15 plus against peers P/E of around 9. Thus it appears to have been priced on the higher side.
On merchant banker’s front, this is the first mandate from its stable and has no track record for SME IPOs. However, it did an issue on main board in2015 that has not done well.
Conclusion: As the renewable energy sector is heading for big prospects going forward, risk aver investors with cash surplus may consider long term investment.
Review By Dilip Davda on June 24, 2016
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of KKV Agro Powers Ltd offers an early investment opportunity in KKV Agro Powers Ltd. A stock market investor can buy KKV Agro Powers shares by applying in IPO before KKV Agro Powers Ltd shares get listed at the stock exchanges. An investor could invest in KKV Agro Powers for short term listing gain or a long term.
Read the KKV Agro Powers recommendations by the leading analyst and leading stock brokers.
KKV Agro Powers offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the KKV Agro Powers Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for KKV Agro Powers is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the KKV Agro Powers.
The KKV Agro Powers allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit KKV Agro Powers allotment status to check.
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