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28 February 2024

Pratham EPC Projects IPO: A Strategic Investment Opportunity in Energy Infrastructure

Introduction:

Pratham EPC Projects Limited, a key player in the engineering, procurement, and construction (EPC) sector, specializing in oil and gas utility services, is set to launch its Initial Public Offering (IPO) from March 11 to March 13, 2024. This IPO, exclusively comprising a fresh issue of 48 lakh shares, aims to raise ₹36.00 crores to fuel the company's growth and expansion strategies.

IPO Overview:

Subscription Period	Listing Date	Price Range	Lot Size
March 11 - March 13, 2024	March 18, 2024, on NSE SME	₹71 - ₹75 per share	1600 shares

Aspect	Detail
Issue Size	4,800,000 shares
Aggregate Value	₹36.00 Crores
Issue Type	Book Built Issue IPO
Market Maker	Spread X Securities
Book Runner	Beeline Capital Advisors Pvt Ltd

Allocation and Subscription Details:

The IPO is structured to cater to various investor categories, ensuring a broad participation base.

Investor Category	Shares Offered
Qualified Institutional Buyers	Up to 50% of Net Issue
Non-Institutional Investors	At least 15% of Net Issue
Retail Individual Investors	At least 35% of Net Issue

Company Highlights:

Pratham EPC Projects Limited has established itself as an integrated service provider in the energy infrastructure sector, with a focus on gas pipeline projects. It has gained recognition for its proficiency in welding, testing, and commissioning of oil and gas pipelines.

- Quality Certifications: ISO 10002:2018, ISO 14001:2015, ISO 18001:2007, and ISO 9001:2015
- Project Portfolio: More than 12 projects completed, with five major ongoing projects worth approximately ₹19,397.33 lakhs
- Employee Strength: 770 as of September 30, 2023

Financial Performance:

Pratham EPC Projects Limited has shown a steady increase in its financial performance, with notable growth in revenue and profit after tax (PAT).

Financial Metric	30 Sep 2023	31 Mar 2023	31 Mar 2022	31 Mar 2021
Revenue (₹ Lakhs)	3,581.37	5,167.29	5,062.66	3,085.03
PAT (₹ Lakhs)	523.41	764.12	441.32	112.85

IPO Objectives:

The net proceeds from the IPO are earmarked for:

1. Purchase of machinery.
2. Meeting working capital requirements.
3. General corporate purposes.

Market Capitalization and Key Performance Indicators:

1. Market Capitalization Post-IPO: ₹133.2 Crores
2. ROE: 45.10%
3. ROCE: 24.81%
4. Profit Margin: 15.26%

Investment Perspective:

Pratham EPC Projects presents an appealing investment opportunity for those interested in the burgeoning energy infrastructure sector. The company's strategic focus on oil and gas pipelines, backed by a solid project pipeline and robust financial performance, underscores its growth potential. While the issue is priced competitively, it offers potential value to investors looking for exposure in the EPC sector with a medium to long-term investment horizon.

Conclusion:

As the energy sector continues to evolve, Pratham EPC Projects Limited is well-positioned to leverage its expertise and experience. The IPO not only aims to fund its ambitious expansion plans but also offers investors a chance to be part of a company with promising growth prospects. Investors are encouraged to consider their investment goals and perform due diligence before participating in the IPO.

Frequently asked Questions (FAQs )

What is an IPO?

An Initial Public Offering (IPO) is the process through which a privately-held company offers shares to the public for the first time, thereby becoming a publicly traded company. This allows the company to raise capital from public investors.
Who is Pratham EPC Projects Limited?

Pratham EPC Projects Limited is a company that operates in the engineering, procurement, and construction (EPC) sector, specializing in utility services for the oil and gas industry, including pipeline projects.
When is the Pratham EPC Projects IPO scheduled?

The IPO subscription period is from March 11 to March 13, 2024.
What is the price range for the IPO?

The price range for the Pratham EPC Projects IPO is ₹71 to ₹75 per share.
How many shares are being offered in the IPO?

The IPO consists of a fresh issue of 4,800,000 shares.
What is the purpose of the IPO?

The net proceeds from the IPO are intended for the purchase of machinery, meeting working capital requirements, and for general corporate purposes.
What are the investment categories in the IPO?
The IPO is structured to cater to various investor categories:
- - QIB (Qualified Institutional Buyers): Up to 50% of the Net Issue
- - Retail Investors: At least 35% of the Net Issue
- - NII (Non-Institutional Investors or High Net-worth Individuals): At least 15% of the Net Issue
What are some key financial metrics of Pratham EPC Projects Limited?

Revenue and Profit After Tax (PAT) have shown steady growth over the past years.

As of September 30, 2023, the company reported a Revenue of ₹3,581.37 Lakhs and a PAT of ₹523.41 Lakhs.
What makes Pratham EPC Projects Limited a good investment opportunity?

Pratham EPC Projects Limited presents a compelling investment opportunity due to its strategic focus on the energy infrastructure sector, a solid project pipeline, robust financial performance, and its growth potential within the burgeoning oil and gas industry.
How can I invest in the Pratham EPC Projects IPO?

To invest in the IPO, you would typically need to have a demat account with a registered broker. During the subscription period, you can apply for shares within the specified price range. Your allocation will depend on the demand and the investor category you fall under.
What is the expected listing date for the IPO?

The shares are expected to be listed on the NSE SME platform on March 18, 2024.
What are the risks associated with investing in this IPO?

As with any investment, there are risks involved. These can include market risk, where the share price may fluctuate post-listing, and sector-specific risks related to the oil and gas industry. Investors should conduct their due diligence and consider their investment goals before participating in the IPO.