EKI Energy Services IPO Fundamental Analysis

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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:

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

Objects of the offer

  1. To meet Working Capital requirements (Rs 14 crore)
  2. General Corporate Purpose
  3. 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 Energy Services IPO Fundamental Analysis

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

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

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.

 

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About CA Priyanka Choudhary Jain 69 Articles
Chartered Accountant & an experienced credit analyst. She has worked with CRISIL as a Senior Credit Analyst on rating assignments including business & financial analysis in Corporates as well as the Public Finance Sector. Please mail your queries, feedback, and any suggestions to her on info.financepost@gmail.com

3 Comments

    • 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.

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