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18 October 2023

Techknowgreen Solutions IPO: Pioneering Environmental Solutions

Introduction:

Techknowgreen Solutions Limited, formerly known as Techno Green Environmental Solutions, is a pioneer in environmental consulting services in India. Established in 2001, the company focuses on providing environmental IT solutions through software applications and compliance solutions.

IPO Highlights:

The Techknowgreen Solutions IPO was valued at Rs 16.72 crores, consisting entirely of a fresh issue of 19.44 lakh shares. The IPO subscription window was open from September 18, 2023, to September 21, 2023. The allotment results were finalized on September 26, 2023, and the shares were listed on BSE SME on September 27, 2023. Priced at ₹86 per share, the IPO had a minimum lot size of 1600 shares, requiring a minimum investment of ₹137,600 for retail investors.

Key Market Players:

Indorient Financial Services Ltd acted as the book running lead manager for the Techknowgreen Solutions IPO, while Bigshare Services Pvt Ltd served as the registrar for the issue. Alacrity Securities was the market maker for the IPO.

Stock Performance:

As of October 6, 2023, Techknowgreen Solutions Limited's stock was trading at ₹122.25, showing a 4.98% increase. The stock opened at ₹121.35, reached a high of ₹122.25, and had a low of ₹119.90. The previous closing price was ₹116.45, with a total traded value of 1,26,400 shares.

Ownership Structure:

Before the IPO, the shareholding stood at 89.02%, which later reduced to 65.58% after the IPO.

Financial Insights:

Techknowgreen Solutions exhibited robust financial performance. As of March 31, 2023, the company's assets amounted to ₹1,237.25 lakhs, reflecting a significant increase. The company reported impressive revenue of ₹1,486.28 lakhs, marking substantial growth from previous years. The profit after tax reached ₹451.38 lakhs, showcasing substantial profitability. The net worth increased to ₹633.63 lakhs, with reserves and surplus standing at ₹124.00 lakhs. Total borrowing amounted to ₹287.40 lakhs.

Market Indicators:

Key performance indicators included a Market Capitalization of ₹63.49 crores, a Price-to-Earnings (P/E) ratio of 9.71, and a Return on Equity (ROE) of 88.57%.

Objectives of the Issue:

The net proceeds from the IPO were intended for various purposes, including:

1. Investment in research and development (R&D) initiatives.
2. Investment in office premises.
3. Refurbishment of new office premises and purchase of office equipment.
4. Expansion of execution and support service teams.
5. Repayment of bank facilities.
6. General corporate purposes.

Expert Opinion:

Noted that the company is engaged in consultancy and related services for environmental issues. It has displayed growth in both its top and bottom lines over the reported periods. FY23 performance resulted from a shift towards the consultancy business from servicing activities. The IPO was fully priced based on its outstanding FY23 earnings. He suggested that investors could consider investing for medium to long-term rewards in this pioneering company, which has bright prospects ahead.

Subscription Status:

The Techknowgreen Solutions IPO garnered significant interest from investors, with an overall subscription rate of 12.98 times as of September 21, 2023. Retail investors showed remarkable enthusiasm, with a subscription rate of 15.82 times.

Conclusion:

Techknowgreen Solutions Limited's IPO marks its entry into the public market, highlighting its significant contributions in the field of environmental solutions. Potential investors should conduct thorough research into the company's offerings, growth potential, and competitive landscape before making investment decisions. As with any investment, diversification and prudent risk management are key strategies when considering IPO opportunities in the environmentally focused sector.

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