Issue Open: August 24, 2011
Issue close: August 26, 2011
Price Band: Rs. 256 - Rs. 261 Per Equity Share
Minimum Bid Size: 25 Equity Shares
Face Value: Rs. 10 Per Equity Share
Issue Type: 100% Book Building
Maximum Subscription Amount for Retail Investor: Rs. 200000
Company
T D Power Systems (TDPS) is Bangalore based leading manufacturers of AC Generators with output capacity in the range of 1 MW to 52 MW for prime movers such as steam turbines, gas turbines, hydro turbines, wind turbines, diesel and gas engines. Along with AC Generators Company also executes Turbine Generator ("TG") island projects for steam turbine power plants with output capacity up to 52 MW using a Japanese turbine combined with their generator. Company is ISO 9001-2008 certified.
The consolidated order book is Rs. 1094.69 crore as end of June 30, 2011. The company proposes to use the net proceeds of the IPO for financing expansion of the existing manufacturing plant in Dabaspet, Bangalore, and for the construction of a project office in Bangalore. It also proposes to utilize part of the net proceeds to repay debt, fund working capital requirements and for other general corporate purposes.
IPO Grading / Rating
CARE has assigned an IPO Grade 4 to TD Power Systems IPO. This means as per CARE, company has 'Above Average Fundamentals'.
Valuation
The consolidated EPS for FY 2011 on post-issue equity of Rs. 33.24 (at lower IPO price band) and Rs. 33.07 (at upper IPO price band) works out to Rs. 17.1 thereby giving P/E of 15-15.3 times. Thermax is the closest comparable player in stock markets which is currently trading at 15.6 times FY2011 EPS.
Conclusion
T D Power Systems is a power sector player which makes it attractive as a business with huge scope of growth in future. The pricing of IPO looks okay and may witness some listing gains too for IPO investors. One may invest in IPO from longer term investment perspectives too.
