Inox Wind IPO opens on 18th March; Subscribe

Hem Securities | July 8, 2010, midnight

Objects of Issue:


Offer For Sale


Company will not receive any proceeds from the Offer for Sale by the Selling Shareholder and the proceeds received from the Offer for Sale will not form part of the Net Proceeds .


The Fresh Issue


Company proposes to utilise the Net Proceeds towards funding the following objects:


1. Expansion and upgradation of existing manufacturing facilities;


2. Long term working capital requirements;


3. Investment in co’s Subsidiary, IWISL, for the purpose of development of power evacuation infrastructure and other infrastructure development; and


4. General Corporate Purposes.


Strengths:


- Recognized Promoter group: Co is a part of Inox group which has commenced operations since 1923.The Inox Group includes two public listed cos: GFL & Inox Leisure. Co’s promoter GFL , has been a pioneer of carbon credits in India and has been among the largest generators of carbon credits globally. It is also the largest producer by volume of refrigerants and polytetrafluoroethylene (PTFE), a synthetic fluoropolymer, in India .Hence Co’s promoter group with its long history,business relationship & financial stability infuses optimism in co’s customers & business.


- Healthy Order Book : Co’s order book included orders for WTGs with aggregate capacity of 1,258 MW as on 31 Dec,2014. This comprise of orders for supply and erection of WTGs with aggregate capacity of 694 MW, including 50 MW ordered by IRL, a Group Company& orders for only supply of WTGs with aggregate capacity of 564 MW.Co’s order book includes executed binding contracts for WTGs with aggregate capacity of 826 MW and signed term sheets or letters of intent, which are subject to the execution of binding contracts, for WTGs with aggregate capacity of 432 MW. Out of the above order book, WTGs of aggregate capacity of 122MW have already been erected and commissioned as of December 31, 2014, and hence, a significant part of revenues in respect these WTGs has been recognized and payment thereof realized by December 31, 2014.


- High quality WTGs based on sophisticated technology and design: Co manufacture the major components of its WTGs, including nacelles, hubs, rotor blade sets and towers, at its in house facilities. Co have a perpetual license from AMSC, a leading wind energy technology company based in Austria, to manufacture 2 MW WTGs in India based on AMSC’s proprietary technology. Co’s license in India is exclusive, subject to three existing licenses that AMSC had previously granted for the production and sale of 2 MW WTGs worldwide, including in India. According to the December 2014 performance letter from AMSC, more than 9,300 WTG units worldwide, with more than 15,000 MW of aggregate production capacity, are installed based on AMSC technology. Co also have a non-exclusive license from WINDnovation for custom-made rotor blade sets. Co’s Type Class III-B 2 MW WTGs have been designed and developed after due assessment of wind site qualities and conditions across low wind resource locations, such as those in India.


Valuation:


The company is bringing the issue at price band of Rs 315-325( Incl Rs 15/Sh discount to Retail & Employee) at p/e multiple of 29-30 on post issue 9MFY15 annualized eps of Rs 10.76.


The company with its robust financial performance ,well recognized promoter group, healthy order book & strong business potential looks an attractive issue to deploy the funds in. Hence, we recommend “Subscribe” on issue.

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