Last updated on May 9th, 2021 at 04:35 pm
EKI Energy Services IPO Fundamental Analysis
EKI Energy Services with its registered office at Indore operates in multiple business verticals. EKI is coming up with IPO amounting to Rs 18.60 crore. It would be listed on the BSE SME platform. Offer details follow:
[su_table]
| Offer Details | |
| Offer Size | 18,24,000 equity shares amounting to Rs 18.60 crore |
| Price Band | Rs 100-Rs 102 per share |
| Offer Period | Mar 24- Mar 26, 2021 |
| Offer Structure | QIBs: upto 50% of the offer NIIs: upto 15% of the offer RIIs : upto 35% of the offer |
| Market Lot | 1200 shares |
| Listing on | BSE SME |
| BRLM’s | HEM Securities Limited |
| Registrar | Bigshare Services Private Limited |
| Equity shares Outstandingprior to the issue | 50,50,000 |
| Equity shares outstanding post Issue | 68,74,000 |
[/su_table]
Objects of the offer
- To meet Working Capital requirements (Rs 14 crore)
- General Corporate Purpose
- To meet issue expenses
Business Profile
Incorporated in 2011, EKI is in the business of Climate Change Advisory Services, Carbon Credits Trading, Business Excellence Advisory, and Electrical Safety Audits. The company offers its services to various clients in the government and private sectors like power generation, waste management, clean development mechanism, airports, and many more industries. As of Sep 2020, Eki had 70 full-time employees.
EKI is a certified provider of different types of services relating to carbon offsets generation projects and National/International management standards implementation, management consulting, audit, training while considering the context of the organization and to meet the needs and expectations of all interested parties stakeholders, statutory and regulatory requirements.
EKI’s Service Portfolio includes
1) Climate Change Advisory Services
2) Carbon Credits Trading
3) Business Excellence Advisory & Training Services
4) Electrical Safety Audits
The company has a broad client base in India representing some large Indian industrial groups, Indian Power Producers, banks and other financial institutions, central public sector undertakings, SMEs, and government bodies. Some of its clients are the World Bank, Airport Authority of India, NTPC, GAIL, Bank of Baroda, and others. Its client base expands to various other countries like Australia, the USA, Germany, Europe, and many more.
EKI Subscription Status
[su_table]
| Subscription Status {no. of times (x)} | ||||
| Particulars | Shares Offered | 24th March | 25th March | 26th March |
| QIB | 0.00x | |||
| NII | 0.02x | |||
| Retail | 0.02x | |||
| Employees | – | – | – | – |
| Total | 0.02x | |||
[/su_table]
Financial Review EKI Energy Services IPO Fundamental Analysis
Issuer’s financial performance has shown significant improvement in both revenues and margins for the last three fiscal years.
EKI posted total revenues of Rs 59.96 crore for 9 months ending and PAT of Rs 5.39 crore. Total revenues in FY20 increased 232% to Rs 66.02 crore from Rs 19.88 crore in FY19. PAT rose to Rs 4.47 crore from Rs 0.68 crore in FY19. EBITDA and the net margins have been decent in the last three fiscals. Return on net worth has been strong at 74% for FY20.
Valuation and peer comparison
The issue appears to be reasonably priced at annualized EPS for nine months ended 30th Sept 20. At annualized EPS of 14.21, P/E is 7.18 at an upper price band of Rs 102. P/BV is 4.48x at NAV of Rs 22.78 per share. As per RHP, Mitcon Consultancy and Engineering Services Limited is shown as the peer of Eki and its P/E is 13.02x.
Conclusion
EKI focuses on client-centric services particularly in the field of energy conservation, climate change advisory & business excellence sector, offering services like consultancy, advisory, compliance, audits, trading & training to become more profitable and sustainable.
The government’s thrust on clean and green India and the development of renewable sources of energy has created awareness among the business community and paved the way for the continuous growth and expansion of the company’s operations. The Issuer’s financial performance has improved significantly with the increase in both topline and bottom-line numbers for the last three fiscals. However, the sustainability of revenues in the future years needs to be tracked in the coming years. The Offer is reasonably priced and investors may consider it for the long term.
Related Posts
- One MobiKwik Systems Limited, MobiKwik IPO - 14/10/2021
- Bharti Airtel Rights Issue- Should You Subscribe? - 07/10/2021
- How to Check your IPO Allotment status? - 28/09/2021
Disclaimer: The above content is for general info purpose only and does not constitute professional advice. The author/ website will not be liable for any inaccurate / incomplete information and any reliance you place on the content is strictly at your risk.
Follow us on Social Media by clicking below
Follow @financepost_in
Should I invest in this IPO?
If one has a long-term perspective, one might invest. It’s an SME IPO and would be listed on the BSE SME platform.
We give our suggestions/opinions based on fundamental analysis. However, we do not give any comments on listing gains/ recommendations.
Thanks