The fact that this IPO has been graded just 1 on 5 means by CRISIL means that I will be taking the short – cut yet again, so this will be a short summary. The price band is between Rs. 65 and Rs. 75, and the offer closes on April 28th. One of the first things to catch my eye about this issue was that just like the Talwalkars issue – they had issued shares for cheaper in the past 12 months; they issued shares at Rs. 60 last November. The second thing that caught my eye was that one of the stated risks that the company faces is substantial indebtedness, and their loans constitute up to 88% of their net worth. The company has also reported negative cash flows for fiscal 2006, 2007 and 2008.
A little bit about the company now – Tarapur Transformers was incorporated in 1988, and in 2006 – 07, they were acquired by the promoters of Bilpower Limited. The company manufactures transformers and has an installed capacity of 1839.40 MVA, and repairing capacity of 1800 MVA per annum.
A look at theÂ financials show that the company had a EPS of Rs. 2.06 in 2008 – 09, 1.87 in 2007 – 08, and 1.03 in 2006 – 07. A look at the competitors P/E multiples shows that Tarapur has priced its offer at the higher end. Voltamp Transformers has a P/E multiple of 10, EMCO Transformers has a P/E of 8.50 and Rectifiers India has a multiple of 11.
Not the kind of thing that interests me, but if you are going for it, then all the best to you!