Vikran Engineering, Anlon & other August 4th Week IPOs : Apply/Avoid? Primary Market Chatter

0:00 Hey. Hi everyone. Welcome to Primary Market Chatter brought to you by Sunday Investing. This is our August 4th week episode and we'll be talking about the companies which are coming in this time. So sorry we lost track of dates and that is why we couldn't do the two issues and it was something which was communicated to us by a couple of kind folks as well. Sorry about that. But yeah, the two companies which we were decent we are missing out on a few companies but it's just that there are so many issues. It is becoming difficult to put a review for everything. So kindly bear with us while we still try and perfect this format for today. Uh all five of us will be here and we'll be reviewing one company uh each majorly and then Sachin

0:47 will be doing two. Uh so what we'll be doing is we'll be reviewing uh one main board Vikram engineering and then we'll also be talking about fivememes we'll be doing anundata classic although the review for both uh the IPO application date for both has been completed but sorry about that and we'll also be talking about current infra n satwa and that's pretty much it the five companies satwa we have added later because manag we didn't see satwa and it's somehow still going very under the radar. It is a vivo issue. So, we thought we'll review it. Uh but yeah, that is the agenda for today. Before we actually get started, just want to again uh highlight that with our favorite housekeeping

1:32 announcements. Uh we are not SEB registered research analyst. I'm review this is not qualified opinion in any possible way. Think of it as just two folks, four folks, five folks chatting about what company they are going to do, what they are going to apply with. Do your due diligence investment managers apply and not apply. Whatever you decide to do, we we because we don't understand your circumstances, you don't understand our circumstances. So, it's important to take it only as educational content where we are discussing companies. Uh so having said that uh that is the first housekeeping announcement. Second as I always say that if you have not joined our YouTube channel please go ahead and do that. Link is in the pin comments

2:19 comments Sunday investing companies I post that uh um uh that on our space. So I will uh put uh today's company's review by tomorrow. Uh so definitely uh subscribe to the channel as well. with that we were at alpha ideas last week. It was a great event. Thank you so much for everyone for u just interacting with us. I know this time name text so it is difficult to put face to the name but yeah uh we interacted with a lot of people and it was a lot of fun. So thank you so much for giving us that love as well and just interacting it's always like it feels like day one every time that I talk to people there's so much to learn and so much to know and we just the student of

3:06 the game still very naive for the lack of a better word and in terms of like I had a few requests with respect to covering uh companies on alpha ideas I think there are many channels out there who have done a very good job with respect to cover uh the companies which came on alpha And there's only so much value ad that we can do. So we will probably be skipping it. I just want to highlight that if you have not joined go ahead and YouTube channel they will put their reviews there in like let's say 2 weeks or 4 weeks. So there's a timeline through which they review put all the videos there. So that will give you a good understanding all the companies which came in and spoke. Uh so

3:53 do that that hearing from the horse's mouth is always better. uh so with that uh maybe we can get started on the episode. We'll try and keep it tight but before that I know Yash was there, Tanma was there and Rohit was also there. anything that you have to add on alpha uh without specifically covering the companies. >> Nothing specific Manish like you said just good to put faces to names that was the most important value you had of that event. >> Perfect has shown a 100 emoji so I'm assuming it means that he also has the same thing to say. Yeah. With that just want to still highlight if you have any questions feel free to

4:40 post them in the chat box as well. We'll take questions. Uh the first question is will uh an will enlon be covered? Enlon we are not covering it's a smalish issue um with no QIP from what I understood plus we were short on time so we are not covering Enlon today. Uh but Enlon and Gloier are the two companies we are not covering and honestly we haven't read. So uh doing a half big job wouldn't make much sense. So but if we still read them through the week, we'll post our reviews like we done for uh Anunda and Classic. So with that maybe uh we'll probably start with Anunda Medicare. Let me set up Anunda Medicare for Rohit and we'll try and keep it short simply because I understand the IPO application is over. Uh set up in 1999. Company manufactures

5:25 flavored male condoms with the flagship product branded under Cobra. It produces 562 million condoms annually and is a company as manufacturing facility situated in NOA. Uh it's a 70C cr IPO so big size IPO 70 crores IPO at a market cap of 262 crores so around 28% dilution to pre IPO which is good in terms of FI25 financials they complete a revenue of 77 crores revenue and bottom line of 16 crores. So 16 crores but they coming at 262 crores. somewhere around 17p if I get the maths right. In terms of the LM, the LM is Nolia Financial which is a decent LM. Srif was their last issue if I'm not wrong. Yeah. Uh with that maybe over to you Rohit to talk about uh

6:10 Unknown. Thanks R. So this review will be similar to what I had posted on Twitter. Uh so I'll keep this uh short but I'll just try to explain one two things that maybe the Twitter character limit doesn't fully allow. Uh so as he said this is a 70 cr ratio so decent size. They are a manufacturer of condoms currently male condoms only uh that they which they sell in two ways. One is marketed under this Cobra brand and the other is by white labeling. So if you look at their standalone business they did around 60 cr last year. Of that 35 cr of that business actually is to government agencies uh which is essentially white labeling. uh and 25 cr is actually through their own distributor and stockist network which is what actually sells u with that Cobra brand. Now this itself is not an uncommon practice. This

6:57 is how most uh I would say in this segment many companies start out like this because the B2G route uh or the government itself is one of the largest buyers of condoms because of public health programs uh whether it is for family planning or for age prevention and stuff like that. So this allows manufacturers to create that kind of you know steady demand run your plant at full capacity when you know that there's this one big buyer. It also allows you to pro allows you to prove the product and most businesses eventually move from uh B2G to B2C. I mean they'll continue to do B2G but then they will add on B2C as they uh scale which is what Anand's doing. Anand's already in that uh or they've already gotten to a scale where they've also launched their uh brand or the branded condom which is that Kobra

7:43 brand. Now they are using these funds 70 cr they're using I think uh 45 okay I'm forgetting the number exactly now but I think about 45 cr they have said they'll be using for a combination of capex which around 6 cr and the remaining for working capital rest will fall into your GCP uh from a capex standpoint today they can manufacture up to 560 million condoms uh if they were to operate in three shifts but today they're operating only in two and I'm not sure if they can operate in three shifts or whether that's feasible or not. Uh if even if I take that okay they can operate in two shifts you can say that they probably can manufacture 300 350 million uh condoms and they manufacture about 250 260 million or so. So they're near capacity if you consider just two ships

8:29 but you can see that they're uh the the the new capacity that they are adding plus the work in progress that's already there. uh it looks like that they should be able to expand that capacity whatever their operating capacity whether it is 560 or 560 into 2x3 that number can go up by 2.5x so it looks like capacity itself should not be a problem that is something that they're solving uh you know either proactively or because they're close to capacity from an actual utilization standpoint uh overall the numbers are very strong they did about 77 cr last year if you include their subsidiary also which was uh uh rolled enrolled into this business last year uh with 33 odd% Aida, 21% PAT. Uh this is very much in line with Cupid which is

9:14 the one listed pair and I'll cover that. Overall the business is also growing. If you look at standalone business it has grown at around 30 35%, with the addition of a subsidiary is grown by about 60%. Uh one thing is their cash flows are slightly negative. This is mainly because of B2G. So you do have fairly high receivable days. It's not like a typical you know consumer business when you have a government component there will always be some uh stress in cash flows which is why they are obviously raising working capital money uh the if if you look at their projections they are saying they will go from 60 cr to 100 cr 60 cr is the standalone business to 100 cr in fi26 so that's overall about 60 60 odd% growth so if you take that at an overall console level also they can maybe do

10:00 about 115 120 road uh for uh this year which is very very good very healthy growth of course this is not a guidance that they've given uh it's always a little risky with working capital calculations but unfortunately this is the best we have to go on uh given we don't have an interview they also have a fairly strong order book of about 90 cr or so uh for and this includes their B2G business and the orders that are booked by their distributors now for this segment in my view the biggest question is demand Now the government business should be a fairly predictable business. I think they keep winning orders. They have at least visibility for this coming year. The main thing is if they have to grow their B2C business or say the distributor business or their branded business that is the hard one, right?

10:47 Because it's not like there is no other competition. There's so many other brands obviously brands like Manforce or like huge companies like Man Force obviously and so on. So that demand piece is the for me the largest question. They had used some celebrities in the past for endorsements. So it shows that they've done a little bit of this but that piece is what I would want the most clarity on. Again lack of an interview is the biggest challenge here. So can't understand the promoter directly. So what is the closest proxy that we can take it is who is in the preipo and who are the anchors. So the preipo's very a decent set of people people who were very similar in my view to the people who did the preipo uh in part electricals uh you guys can look at

11:32 the names I won't mention them uh and there was also very very strong anchor book uh and the first time I saw sage one which is a fund that I really admire and respect because they are very much a growth focused fund they look at companies with growth uh at reasonable valuations uh and very you know small like micro cap maybe not but certainly more small cap focused and it's very interesting to see them for the first time at least first time that I have seen in anme uh this company is coming at around 16 times now there is one pier like I said cupid and I tried to lay out the difference between this company and cupid but cupid trades at 90 plus uh multiple cupid so so just as a preamble this price disparity of 16x here and 90x reminds me

12:18 very much of monolith and raub very different segment spaces but just as an observation you have one pair at an obscene multiple and this coming at a very reasonable multiple so let's see how the market takes that now the difference between cupid and there is there is a difference though and unlike say maybe raamon are very close peers there is a difference here so cupid has two things which are different one is half their business is export uh export requires even more certifications it requires some UN certifications some who certifications uh and is a ote or it's certainly a uh you know one added barrier of entry that this company has applied for and is applying for but hasn't received yet. So whenever that comes that will be again hopefully a step jump in valuation for for Anand as

13:04 well but Cupid is half export and they have far more diverse products. So they've gone into other things like female condoms, IVD kits, uh they've tested two three other things, some consumer small amount of just consumer products you know like perfumes and so on. uh with Anandita is just saying that they're entering female condoms now. Again the product mix is still you know a little behind but if you look at the India business of Cupid and Anandra business they're very similar even cupid their India business is largely B2G they don't really have as much you know B2C it is still small uh so it it is not and and they have very similar receivable days very similar kind of cash flows and stuff so I I got the vibe that the businesses are similar cubid is just ahead in because they've been around for longer u so for me I mean we've already

13:51 applied already but I personally applied full force in this uh in terms of what I'll do on listing will little bit obviously depend on the screen my main problem here when it comes to holding this a company like this for longterm is I personally could not get in could not see any interviews with the promoters nor you know was I part of any of the preipo road shows so that is a gap for me personally when it comes to making a long-term position but I don't know let's see it looks like there is sufficient valuation gap that Maybe there is a trade also possible, but that will probably be screen dependent. So, let's see how it lists. I'm fairly confident this will list well. It has all those, you know, all the things that I look for personally uh for a good listing. It has a good story, good investors, good growth, very niche

14:37 sector and is super undervalued versus its peers. So, it has all those dynamics together. So, I wouldn't be surprised if this lists very well and maybe does well after that also. anything that you have on their margins? A couple of questions with resp to margins being super high and how are they different versus in a B2G versus a B2C setup? >> I would imagine B2G would be lower margin uh generally uh because it's just a white label product. Uh but right now their margins are very very similar to Cupids. They're like marginally lower than Cupid. So I did not find it uh alarming. uh like this is the only other one where you have Cupid is such a direct pair and their margins are similar. So I did not find these guys

15:24 margins unusual. One thing with cupid though uh just one thing see we are looking at cupid is 90 times trailing which is honestly a little obscene only but uh FMCG companies firstly do trade at very high multiples even if not as high as this but one thing cupid does have and they've promised like I was just going through their annual their last year report and they themselves given guidance to grow from 180 cr in fi25 to 335 cr in fi26 they just sa given that number so they are actually saying that they will grow 80 85% yearonear. So that is also one of the reasons why this company is getting such a high multiple. There obviously isn't a direct multiple given here uh in this because like I said there's no interview but yeah just

16:09 keep that in mind. So maybe if cupid delivers those numbers it is trading at maybe 50 55 times one year forward still very high but yeah just to put that number into context. >> Understood. That's very helpful. And working capital say are they what did you find out what are >> 60 60 65%. They've given the working capital projection for the standalone entity which is the main business at 60 cr business. Then they sell that forward to their uh distributor which is to their different distributors of which one of them is their own subsidiary. So there would be some netting off there but there is some revenue being booked in the distributor as well and some profits being booked there. So when generally when these guys give working capital calculations it's usually just for the standalone. So the standalone they're projecting it to grow from 60 to 100 uh nothing specifically on the uh

16:57 distribute on their uh subsidiary which is another I mean net off I think it adds some 16 17 cr top line understood helpful and then there's one question with respect to them having delays in paying interest on loans etc. But I'm assuming you're not going too much into it. It'sme end of the reason for being right. So >> correct. Correct. Yeah. >> Perfect. With that we move forward. Just one thing before I move forward to classic electrodes. Um Ashish has been kind enough to put in the link of Alpha's YouTube channel. I have pinned that in comments on this chat if someone wants to go ahead and subscribe to this channel. uh they would be usually like there would be a delay of a month or so until they are still processing the videos but all videos which were came on

17:44 uh all companies which came on alpha will have their videos posted here so you can listen to them when they uh come live uh with that let me move forward to the second company which is classic electrodes set established in 1997 company is a prominent Indian manufacturer specializing in welding consumables including electrodes and MIG wires it manufactures welding electrodes and provides engineering solution to domestic and international ational customers in terms of the IPO it's a 41.5 cr IPO chalis IPO market cap 156 crores so diluting around 30% less than 30% in terms of the FI24 financials so FI25 11 months which I don't know like why was it 11 only but yeah in terms of the FI24 financials revenue of 195 crores and P of 12.3

18:31 crores and like basis FI24 it's coming at like 12 13 times and I think similar at FI25 also we'll understand from Sachin when he's explaining a company in terms of the LM the LM is G capital so with that over to you Sachin to talk about classic electro >> am I audible >> y >> all right so I'll keep it short uh so this classic electrodes uh it mainly manufactures different type of electrodes for various industries be railway be building material construction industry steel structure etc and This uh MIG wire thing is uh used in for welding of specialized steel. So these are their primary products. So they currently operate in two units. Uh one in is West Bengal and

19:17 another is in Hana. They also had a separate unit in Hana which was closed in FI23. But uh their operations were shifted to the current unit. So their utilization has been around 65% for the electrodes and MIG wires as well around 60% in both the units. uh in the IBM they are trying they said that they are trying to increase the utilization maybe 70 to 80% going ahead and they also have a spare land available so that is around 23,000 24,000 ft of land is available so I'm assuming around 6,000 metric ton to 7,000 metric t would be the capacity uh that would be added further using the IP proceeds so uh for the IP proceeds they are raising around 40 crores 40 41 crores I'm assuming and uh primary is

20:02 for working capital around 16 crores and then they are also repaying some debt around 10 CR and uh another is 1.5 CR is for capex. So they already uh deployed around 9 to 9.5 CR in capex for these machineries in the existing land at West Bengal. And now to complete that setup they are using this IP proceeds. So FI23 was uh 151 CR uh with 6% AIDA uh in revenues and in FI24 they did around 193 CR with 12% AIDA. So they mentioned that they are trying to maintain these margins and in FI25 they are they what they are projecting and what they tried to say that they have uh did around 200 210 CR in revenues with similar AIDA of 6.5%. Uh the biggest risk here is they haven't

20:48 grown up much yet despite being in operations from 1997. Uh they only have managed to grow in West Bengal where they derive around 70% of their revenues and since there are fragmented pockets in other areas as well for this uh and welding things. So it's difficult to scale up in other states. So uh coming to the pricing it's around 12 to 13 times even on FI25 and what they are projecting for FI26 and 27 is around 20% uh growth in revenues. Uh in terms of the peers there are many peers diffusion engineers DNH India and mainboard and then there is ador welding as well. Uh one Royal Arc in Sme came as well uh recently. So uh these mainboard guys are trading in around 28 to 30 uh p region.

21:34 uh whereas this royal arc maybe due to theme and some uh non-visibility on what they are trying to do uh it's trading around 20 times and which I think uh this one should also trade and here the valuations of royal arc so JYR was the lead manager uh it has group good reput also decent art was there and when IMAP India fund was also there uh there is also a shareholding from one of the group entities of Kitika wires which is already a listed uh entity in the stock exchanges but hasn't uh done quite well yet. So uh growth is a big concern here. Uh what they are trying to project and what actually might come might differ. So that is one thing to note. >> Perfect. Thank you. Thank you s I also applied in this very limited with the

22:20 view of I think listing protect but yeah let's see uh like IP price protect so it should give some gains but yeah let's see I also went anund anunda way with that maybe let's move forward about the talk about the third company which is current infra uh everything from anunda get gets used in current infra which is good but let's first understand uh current infra setting up current infra established in 2013 companies are infrastructure and renewable energy company offering civil, mechanical, electrical and water engineering services in the EPC format. Company also engages in hospitality services while leasing a farmhouse property. Uh setting up the company uh it's a 41 cr IPO 41 crores IPO market cap 153 crores. So 153

23:05 crores per company 41 42 crores raise all of which is a freshue going into the company for 25 financials to revenue 91 crores pat 9.5 crores so so they coming at somewhere around 16p drilling lm is holani consultants which has a great name uh amongst the LMS is selective in the kind of work it does but for me it's hit and miss we'll try and understand about But over to you yes to talk about current infra. >> Cool. Manish can you hear me? >> Yeah. So current infra is an infrastructure and renewable energy company uh majorly delivering civil

23:50 mechanical electrical and water engineering services. They are more focused in EPC and Turkey of the projects uh across various sectors like solar, electrical, water and civil EPC. Their contracts include uh interior work, road uh road furniture. They are also specialized in uh engineering, consulting and mechanical and electronical and plumbing system which is called MEP along with the they also provide project management consulting services. They have also uh diversified as Manish highlighted uh in the hospitality through leasing of its own own farmhouse property and Yahavei the farmhouse. So uh the business they they are in 12

24:36 plus years into the business. They have completed more than 80 85 projects. Uh they have an order book of 280 kores. So in terms of what they're doing uh they're raising 41 to 45 crores through this IPO. What they want to do is they want to establish a solar power plant. A specific portion of this IPO funds will be deployed in a subsidiary for a project to establish a solar power plant. Uh the next thing which they want to do is the significant portion is designed for the working capital needs which aim to reduce the need for the f further external loans to complete the ongoing projects. In terms of profitability the company has demonstrated a decent improvements in net profit over last 3 years uh 1.5

25:22 crores say 5 crores then 9.5 crores in FY24 to top line was 91 crores and PAT was 9.45 45 to almost 9 to 10% profit margins. Majorly as per management this increased profitability is due to gaining experience and becoming smarter in operations. Their key strategy includes improving the purchasing cost and a strategic shift from accepting mostly subcontracting wor which had tougher margins to securing most more direct orders to subcontracting say company shifting towards more direct orders. Also what they plan to do is they also plan to change the split. Right now it was more of a private to government. 70% was private and uh 30%

26:10 was more of a government government uh government thing but they want to gradually migrating towards government project at as it gains experience and completion certificates. Uh this strategic move towards potentially larger and more stable public sector contracts. Although gives a good experience and completion certificates to the company but in terms of working capital it extends the number of days and the bad payment cycle which is which is there in the government sector businesses geographical expansion also they are doing they're currently working in 12 states uh mostly in the regions like Rajasthan Kerala Tamil Nadu and Orisa they add all or they have an ambition to add more states in their portfolio

26:58 uh right now the company is mainly into uh most of electrical EPC but they've also expanded into water and its current primary focus is on solar EPC which they said is a suns industry I highly doubt u given they're coming very late in the IPO and the solar theme as per the market is already discounting the next 2 years next 3 years uh that is there uh the new business vertical which are potentially exploring is uh evolution into the battery storage systems. Uh what I like is Mr. Sunil Singh uh which is the managing director and chairman is very optimistic and confident through how he speaks. He's very very sorted and

27:45 speaks about the company as very young and full of energy. So in short this is a good business, good promoter. uh I would say should we we should apply. Uh one more thing which I like to highlight is uh the repeat business from their key clients. 92% of the company's revenue comes from the top 10 customers which which also has a track record of receiving high repeat orders from their large players like GR Infra Wellspun and DRA and that is also based on the timely completion and quality of work. So in short should apply and see how it performs post listing. Uh the only thing of concern is uh the sector the company's coming very late uh in terms

28:32 of the solar theme and the market is almost over the rerating has been done to many of the companies and uh the earnings the pricing price in for the earnings growth is left. So I highly doubt that how what multiple market would give but but yeah better than what they're coming in. I think this is coming at 15 15 times FY24. So the valuations are very good. We should apply and and see how it performs post listing. >> Perfect. Thank you. Thank you for the sweet and short review. Very similar review for me as well. I'll be applying but don't plan to hold this sector for long. not very bullish on the sector per se especially because I feel that a lot of rerating has happened what had was to

29:17 happen and this is one of the late entrance in the industry yeah with that maybe we can move forward to the fourth company before I talk about the fourth company there are a couple of questions with respect to Mongal electrical the thing is uh we had already covered Mangal electrical in our last uh meet so if you if you want to listen to Mangal go ahead and uh go to this channel. The first video should have a specific 10 15 minute section on Mongal. So don't want to repeat anything on that. So go ahead and uh follow the YouTube channel and listen to Mangal there. If you want to know about our view uh because we have already covered it. So in the interest of time moving forward talking about the fourth company which is NIS management uh setting up NIS management incorporated in 1985. So

30:03 a super old company 40s uh companies engaged in the business of security and facility management based in Kolkata. It offers range of services including man cards, electronic surveillance, facility management, payroll processing and housekeeping. In terms of the IPO, setting up the IPO is a 60 cr IPO big IPO. Uh 52 cr is a fresh issue. Market cap 220 crores. So dilution is somewhere around 28% again. F25 financials uh revenue 400 crores uh PA 19 crores. So they're coming at somewhere around 12p which is good because they have valued it at a slightly lower end in terms of wherememes are valued but then the segment in itself deserves like uh like the P this segment gets is also low so that needs to be kept in mind in terms of the LM the LM is share India uh so

30:50 with that uh just kind of very quickly covering NIS and I'll probably try and keep very short uh because the sector in itself is again uh not the best sectors where where where I like to invest in But again as I said the companies in facility management mainly uh security guards or housekeeping services provide they are majorly Kolkata based started in 199 1985 and then they got a few hospitality clients like Taj and then they formed their own wholly own subsidiary which was this one uh the uh NIS security facility management and right now they work with a lot of diverse and esteemed clients like Reliance Retail, Pyramal Group, HDFC

31:36 Bank, Torren Power, uh airports, government institutions and facility management services which is your housekeeping security essentially under the National Skill Development Corporation, they work with NSDC and uh try and upskill the people and then give them job along with NIS itself. So it is in a way thought of like a backward integration and the government there are some schemes where the government gives you uh money for the training courses uh if you are able to place these people so

32:21 that is what they do the placement is with their own so it kind of helps to be able to do that but that is a B2G sector so bad receivable days etc but very good profitability in terms of the business so around 41 businesses I mean 41% of business which is 42 crores topline in F25 166 crores is from security services 146 crores 36% is from housekeeping services and then they have recently moved into like 2 3 years ago they have moved into facility management and CCTV projects wherein CCTV uh key uh install airports pay in they take contracts and um and uh install these services install all CCTV and complete projects which is

33:07 a higher IITA margin and s and a higher entry barrier business as well like to be able to take projects of big scale 8 crores 10 crores of security uh CCTV camera installation. So they basically uh buy the CCTV cameras buy the cables connectors whatevers do the wiring and then complete the CCTV project. So think of it like a EPC for CCTV project. They they do that. This is a good segment in itself because there is so much surveillance which will happen but end of the day this is a low mode business and uh because still you are doing the manpower and the installation itself and then the some 2.5 crores is from the kita academy which is through trainings etc and then five cr five crores is through training other projects. So that

33:53 is the high level revenue of the business. uh the business is very consistent like they were they have been able to make 19 crores in FI24 19 crores in FI25 15 crores in FI24 15 crores in FI25 as well uh so seems that it is tricky business they are doing what they are doing but end of the days is a very low pack margin business right men power business so uh will continue to be very low pack margin like the pat margin is what 4% and CCTV cameras etc the government institution would be higher margin they are trying to move to that segment from my understanding but it it will take some time in terms of the IPO uh 60 crores IPO 8 crores is OFS 52 crores fresh air just working

34:38 capital 36 and then there's a lot of money for GCP and listing expenses etc uh so good business that the sector in itself is slightly prone to uh devaluation by the market because it's such a low at margin business that market always jittery if something goes wrong if a client goes wrong you have so many people on your payroll how will you manage uh preipo 4% preipo couldn't find any of the names which I could essentially uh relate with there was invicta capser which I which I don't know if it's the same in vict or not then there other than that there were just individual names um the inh before I talk about the anchor book in terms of the financial performance as I said they did 18 crores on on 405 crores. So it's

35:26 coming at a P of 11.77 which is low if you think about it. But then the sector it tends to get a similar P. Uh anchor book anchor book was pretty good like at least like to be able to fill in a uh 30% anchor book through your uh preip through this is good like that that there will always be anchor. So I don't think it will die very very soon for the lack of a better word. there will be enough there will be some protection of IPO prices what I feel because there were some names uh like next orbit n capital etc who have taken some stake in the IPO uh in terms of the IPO uh uh peers the peers they have shown is uh quest and team less which are trailing at 16 and 27

36:16 like again maybe I'm wrong but supreme facility management company ID not very long ago I think 3 months ago which I feel is a better player because it was also SM it also had a good uh uh corporate back background they had video uh at that moment of time the IPO came at 76 price and then quickly derated to 40 rupees the price is 40 right now with like almost 40% of IPO uh price being going down I think that that could be looked at as a pair but again want to highlight that didn't have any anchors in it so everything was available for public on day one which what I have seen doesn't tend to do very well. this guy has anchor so maybe IPO price would be protected uh at 12p seems okay but the

37:01 problem is there are other good issues so I would be skipping this issue uh for now and I feel that if I I still have to see that 1 hour interview there's one interview of management where they'll I still want to understand what is the growth plan do they plan how much they do do they plan to do in CCTV etc it's just that theme segment is very growth very very hungry for growth so uh they have said that they have been doing 10 to 13% CGR which would be eaten for breakfast, lunch and dinner by SM segment. Uh but I still want to see that but I feel that even if something has to happen listing uh so I will be skipping this and applying to other issues but yeah that is what my review of NIS was. I'm just seeing if there are any

37:46 questions um no questions on this. Uh are there do you guys have anything to add or we can move forward to the fifth company? Okay. Uh moving to Satwa Engineering. Uh just setting up Satwa Engineering. Before I do that, I see a few questions with respect to JM what to do. Our review is on the channel. Uh what we felt about the company and then listing etc. After listing, we typically don't tend to uh talk about the companies because we may have our biases. we may have a position in gem. Uh so having said that let me now move forward to Satwa engineering and try and just uh set it up for such in I don't have a slide for this so I would just do a very small uh intro of Satwa Engineering set

38:32 it up uh for such an it's a Chindai based EPC company specializing in water infra waste water management and industrial construction projects why I liked it was that it was a vivo issue tends to bring very very few issues a year uh so with that we thought we'll do Satwa review as well so Sachin over to you to talk about Satwa Uh am I audible? >> Yes. >> All right. So uh Satwa as you mentioned is a water APC uh primarily in Chennai and in in areas around Tamil Nadu. So their main focus is in underground seway systems, sewage treatment plants, water treatment plants and operation and maintenance of these plants. So these uh seway systems forms 90% of the revenues and the rest is from these operations and maintenance. Now they are trying to

39:19 increase the operations and maintenance going ahead to around 15 to 20% of the revenues in the coming years. 95 to 96% of the revenues is from government contracts as in they're operating in Chennai and Tamil Nadu and the rest is from private. So they their focus area remains on new projects the new tenders that are brought in and less so on the revamping of existing infrastructure and also they do not have plans to go into the ETPS that is affluent treatment plants for industries because their expertise has been be has been in these water treatment plants. So they do not have the focus to go into ETPs. Uh currently have an order book of around 300 ATCR uh with 13 projects ongoing and execution lies anywhere between 18 months to 24 months. So they are projecting that they can do a 150 CR of

40:05 single order with the money that they are trying to get from IPO and their internal approvals. Uh the their tender win ratio is good around 50 to 60% due to the selective bidding that they do and they have mentioned that there is a pipeline of around 420 CR for their tenders. Uh like any other player in this order APC the H1 to H2 split is around 40 60%. and the transition from JGM scheme the J1 mission scheme tomb scheme is also visible in with Satwa engineering. Now coming to their financials uh they did 84 CR of revenues in FI23. uh when they were largely doing subcontracting work. So that came with 84 CR of revenues and 9% AIDA. In FY24 they transitioned from subcontracting to direct contracting uh but uh faced a

40:52 revenue decline around 77 CR of revenues in FY24 but the margins got improved to around 16% AIA. Now continuing with that in FY25 they did 94 CR of revenues with further improvement in a bit to around 21% and 10% PAT. uh in the coming years they are targeting uh more tenders in areas like Anata, Andhra Pradesh, Uttar Pradesh as well. Uh they are also trying to explore uh new technologies like uh the zero uh zero liquid discharge etc. Uh plus their focus is reducing the retention money. Uh because of this the working capital cycle gets elongated. So they are trying to get more cash generation going ahead. uh the government clients uh that they cater to uh for their revenues around 90% is a

41:37 big risk uh because that dependence then leads to higher cash conversion cycles and working capital is stuck. Uh they also have a 3CR of uh litigation from one BGR energy which is spending from two two to three years. So that I'm assuming will likely go into bad depths because it is also under NCLT case. uh competition is very much tight in this sector be it listed players or unlisted players. Uh their IPO use 27 cr is for working capital and the rest out of the total issue is for GCP. So now coming to the pricing uh in uh September 24 they did pre IPO uh it includes names like Capri Global Afan Faruk Patel which I'm uh pretty sure it is related to Faruk Patel of the KP Energy group. Uh there

42:24 is also Sushil Kumar Agraal and Prakash Dwan from Matterhorn Advisors and I am assuming Sushil Kumar Agraal is related to AA's finances as well. I need to double check that but that's what I saw from uh high level review and uh there is also Sudhir Va family office and fatishwora. So being anro issue this is these names are quite similar like we saw in fly SPS. So now coming to the pricing it's around 15 times trailing and what they are projecting uh in the working capital uh uh projections and what they said in the IPO mid it's around 8 to nine times forward basis uh there are many peers but uh they have specifically mentioned EMS envirro infra as peers and now these are bigger better players listed in

43:10 mainboard so they are obviously getting higher valuations uh satwa might settle in in and around that region around 16 to 20 times if I'm assuming correct that is what the valation market will give it. So that is it. Uh LMS VRO good reputation always uh anchors were decent as well. Uh Mavira was there in Victa Continum was also there. So coming to their uh final review uh there's increase in direct contracting is a plus. Now that is the core focus for them going ahead. Management is good as well. Very experienced and the way they expressed all of what they trying to do and what they're trying to venture into is good as well. And now they are also trying to get more projects into secured funding so that the working capital constraints are lesser going ahead. So I think that it should perform well at

43:56 least what they what the earning that business generates it should perform well uh in terms of that. Thank you. Is it only me who can't listen to such No, I I >> Yeah, I could I could hear I could hear it. Yeah, I could hear you broke for me in the last one minute, but yeah. Uh let me know when you're done. >> He's done. He's done. >> I'm done. I'm done. >> Okay, perfect. Sorry. Yeah. Yeah. Thank you for covering the company question. Is it still because from what I

44:42 understand, right? like people are not able to get back their receivables on time. So what do you think about the segment? I'm not very bullish on the segment as such. It's coming towards the end of all of these companies which came in in June and had a per rating but that has also came down quite a bit. I think it's a case of a bad timing for this issue right or like is how I'm reading it at a high level. uh the Jalan is at the end of his cycle. Very right. But projects they are trying that have been shifted to this Amrut scheme. So and the Amru scheme covers a wide range of products not just for house water thing and they it also covers industrial. So Amrut is a quite larger scheme and it will cover better projects as well and

45:28 whatever is left in Jaljiban it is trying to migrate to Amrut. So that is what the government pushes currently. There are many players in this segment. Ganesh in prize is also doing the same and they are trying to venture into Amrut as well. Uh this is another one. So more like a regional player. Uh the better they operate in the region the better margins they get. Unders perfect with that we have covered satwa I would see I would probably apply for pro we'll see but closer to the date with with that let me with that let me move forward to the last issue for the day which we want to discuss and it's a mainboard issue and a lot of people who are essentially holding on uh for this issue as well so let me just quickly uh set up vicran for tan incorporated in

46:13 2008 company is a EPC company it majorly works in power tnd water infrastructure railway infrared solar energy segment it's a 772 cr IPO out of which 721 crores is a fresh and 51 crores FS market cap this company 250 crores so they are diluting like 30% of the company and IPOs so promoter would have around 50% if I'm not wrong but yeah let's see in terms of the FI25 financials revenue 922 crores company at 78 crores so at 78 crores it's coming at like 35p be railing because it is main board it is justified I guess. Uh in terms of the LM the LM is Penttoat Capital and systematics. So with that over to you Dan to talk about Vikran

47:00 engineering. >> Am I audible? >> Yep. Vikraran Engineering Limited is a is an EPC company specializing in power uh in power there are two segments like transmission and distribution power uh distribution TK and they also have like water infrastructure and small railway infrastructure segment so if I just want to give the revenue distribution the power TNT contributes to like 72.9% revenue water contributes to like 26.8% uh revenue and railways contribute to like.3%. So like till date the company has executed 45 projects across 14 states with an aggregate order value of 1920 crores. At this point the company

47:45 has an order book of 2442 crores. So I'll just list its capabilities. So the company has high voltage transmission lines uh distribution up to like 765 KV and substation in uh GSN uh GS up to 400 KV and they have already installed 30,000 plus smart meter connections and also there's a power distribution network from 33 KV to 15 KV. Uh the company is raising 772 crores out of which 721 cr is a fresh issue and 51 cr is an offs. So the company is embarking 541 crores towards the working capital and rest 180 crores as a GCP. So like GCP is like slightly not slightly a very high portion of the fresh issue. Uh

48:33 coming on its financials FI23 the company cloaked a revenue of 524 crores and a pat of 42.8 crores. In 24 a revenue of 786 crores and pat of 74.8 crores which was like uh 50% kind of a growth. In F25 the compared revenue of 916 crores which was a growth of 16 and a half% growth uh percent uh revenue growth and PAT was 77.8. So PAD growth was like 4% but revenue was like uh 16.5%. The company has got the highest aida margin in the industry and second highest return ratios. So now this is on the back of the asset light model. Company just like just has like 120 employees. So company does is like outsourcing of the work. So now till

49:19 this point I'm being very fast. Now I'll come to you know the few important I'll just tell you the clientele. The clientele is like NTPC power grid telangana Madhya Pradesh Assam government Maharashtra government Andhra Pradesh government uh railways and SJVN and there are like I guess Brada Bihar to client. So now uh the working capital they have given so we don't have any kind of guidance but bas based on the working capital uh adjustments they have given uh data they have given in the RP the company's projecting like appro 45% growth in F26. So if you just uh do the easy your revenue and top line bottom

50:06 line maths revenue comes at like 1330 crores and bottom line at 125 crores. So if you just look at DP multiple on uh FY25 it looks at like roughly 33 times and on FI26 it looks at appro 20 times like exact I would say 20 times so peers peers may transing at 20 * 26 kalpatru at 25 * 26 KC at 30 * 26 and skipper at 28 to 30 times 26 and this is coming at 20 times. So uh like trans and this are trading at the same valuation like post money and the rest are like slightly above and K is at roughly 50% premium. Now uh talking on its capital

50:53 structure the company has done like multiple fundraises the major first one was at 42 rupees per share which was leaded by Ashish Kachia India inflection opportunities fund and Sham Sham Prasad Agarwal. The competitor second pre-IPO which was the last fund raise before the IPO came was it was at 74 rupees per share which was leaded by Everest Finance, India inflection opportunities fund, Nijen, Ashish Kachola, Mukulagraal and all uh and and some few more investors you know now till this the picture picture look decent like you know but now coming on its negative so each thing I feel we need to understand like I'll we'll be speaking slightly you know slow from here so you can get the point. So there are multiple legal cases. The first one is a CBI case which

51:38 involves some bribes and everything. There are multiple civil proceedings against the company and promoters. The third is like a few regulator and statutory cases. And fourth is the tax cases. So art cases which aggregates u the uh payment of damages close to 72 cr. So it's like tax proceedings they like I would say second which is like main I feel is a negative point the trade receable to tradeable 24 which has which has been ining up to 634 K so appro I would say tradeable but revenue growth was like

52:23 16%. Okay. So, trade receiples have like inched up like anything. Cash flows have been deteriorating at a very you know fast pace. The operating cash flow in FI25 was at like minus 130 crores. And if you just put in the data and the additional fund raise to working capital about 165 plus but it makes very less sense because the fundraising was done. Now one more very negative point I saw in this company was a bid win. So F23 company had bidded for 43 projects and it won 18 projects which is like 40%. In FI 24 the company bidded for 28 projects and won nine projects which is roughly 32%. In FY25 the company bidded for 46 projects and won just 9 which is like uh

53:09 appro. So the earlier it used to be like you know 40 45% then it came to 32% now it is at like 18 19% which has been very significant drop. Now between is in terms of uh bids they have bidded. So now coming on the value of the bids FI23 they had bidded for 9,36 cr orders they got 2171 which is appro 20 to 23%. uh in FI24 they bidded for 2138 crores which is a drop by like approx 60 70% and they won for one uh the bids for 121027 crores which is like roughly 45%. But now check out the F25 numbers they bed for 7,378 crores and 17001 which is like 8 and a

53:56 half%. Which is a ultra significant drop. Okay there's one more negative. railways have banned the company for 2 years which due to involvement in some illegal gratification like you know there should be roughly a bribing while I don't see any other major you know reason for this uh now the next is like order book split uh government is at 62% PSU which is public sector undertakings at 18% private is at 20% private used to be 34% and 24 and now we know there are few state governments which have been like you know continuous delay of payments the government spending has been on a back seat uh and the private uh order books or the revenues coming in have slowown down. So 62% government and

54:41 say 18% PSO I'm not worried on that PSOS are known to pay the payments like at a very decent pace but the government uh you know has been on a very slow note from like last six quarters. So this is a I would say significant negative. Now there is one very interesting point which you need to understand. Very few people will speak on this is the trade receivables which are pending beyond the credit period offered by the companies. Simple. Let's say I am an ex supplier and you are the buyer. So you say to me I would say you agreed on the terms and now

55:26 so this number has been 62 which is like 10% of your receivable 62 credit. So it might came come late, it might be a bad debt or it might be a uh a increase in you know credit period. We have no idea on this. There's like one more small thing working capital is to turnover ratio let's say it like 50 divided 30 to 1.6 an example. Now coming on Vikran's working capital is to turnover ratio. Fi23 it was 2.5 times which is a very good ratio. Fi 24 it came down to 1.9 times which is

56:12 decent. Fi25 came to 1.35 which is poor very poor. So I'm not able to understand key like you know working capital that has been inching like anything and um like I have been like skeptical on the working capital like two three fund raises uh the debt has been like going I guess in cost and this should have some lease liabilities for sure like you know is what I expect so you So if I talk on the valuations post money which is 20 * 26 32 33 34 * 25 to uh just talking on some you know

56:58 uh is background on the IPO and the earlier valuation. So if you let's look at the DRSP they had filed for 1,000 K IPO and as per my knowledge it was expected at roughly 3700 3800 K valuation. So what SEBI rule says key in the RP or the UDRP you can reduce your fresh issue at a tune of 20% No% in the RP they have cut the

57:45 it is the lowest but earlier the valuation was expected 3700 3800 crores now come at 2500 so it might look you know that is a fair point but earlier the expectations of earnings were very different now at a Friend of reason is very simple. The company is burning lot on the working capital and working capital. So like on a personal note working capital dependence that has been for the whole sector and like a player like trans which has been on a on a better capabilities and a better growth like 25% 20% is trading at the same valuation. So like I have a question why should I invest in Vikrant? See the

58:31 promoter has got a very good background. He was from like bits pilani. uh he was in L&T and one of the 20 people who were you know selected in there one of the what we can say uh courses run by then he had joined two three another companies he had joined Bajad he has done like great work but you know that has been decent valuations I would say decent I don't have like you know words coming on but it would have been more better 200 would have been a very great valuation to I feel it is not a bad company but I have uh very less clarity on the working capital mismatch which has been happening credit let's say you're talking you're

59:17 working with your state governments you're working with central government you're working with PSUs credit you know this is like if this was a normal private company you would have professional but 10% of your receivable is like above waiting above your credit period which has been embarked. So uh I would suggest here key let's wait for the by the way it's a Q1 number should be like I would say slight growth only because working capital I so I don't have much hopes on the Q1 but hoping Q3 grow due to the working capital infusion which is which should happen from the IPO proceeds or GCP component so I

1:00:03 guess% of the fresh component we have no idea you know so uh listing like at this point I have no opinion I might give a clear opinion in my final verdict but at this point I would say I would wait it's a good company not a bad one at all but this clarity ifs don'ts doubts tax proceedings working capital mismatchable private has been going down, government is going up, government. So I would wait and let the market give it a value or I would like to enter. So

1:00:48 Piso is not a bad valuation neither a great valuation. It is somewhere in the middle. Um anchor book was decent you know three four five mutual funds taking like majority and market to it was on a decent note like six on 10 type anchor book or better host but not a bad one. So I would wait personally uh you know for the Q2 and Q3 result Q2 resil Q3% but now it is on the market whether to discount the Q3 we have no idea because government related companies have been on a backseat on the listing and specifically are

1:01:33 purely for listing. So this was overall on Vikran engine from my >> perfect thank you thank you s uh very similar story right the markets are very choppy so anything which is uh like everyone's earing on the side of caution per se right so I feel that it will continue with vikran as well but anything on the anchor book did you happen to have a look at the anchor book So anchor book may we saw the major allocation from bank of India mutual fund IT mutual fund uh these were the major guys then we saw names like Nen

1:02:19 SBI general seno and Kashula putting some putting some Taurus VP normally so it is a typical pantomat capital IPO anchor book and this uh coming in IT Bank of India was on the preip Bengal was in preipal IMAP is like in majority mandate socially ludia is like in every IPO so Samo is also in majority IPO so I feel it is not a bad one but neither a great one like you know or better and I'll tell you mans has been turbulent so I cannot you know have I don't have words The anchor book is not great because the markets are tulent market.

1:03:05 So I won't judge the anchor book based on the current market situation. >> Well, I found the anchor book honestly in mutual funds had taken like good 70% of our location right so it it wasn't your typical theme anchor book at all right by any way I is a big one. So it has been like you know it was on the expected lines you know like just know found and coming out of the box but you know it is a good name for sure but not a very superior name like >> got it part.

1:03:51 >> Yeah with that we are almost towards the end of the space. I can tell one thing. I've got multiple teams. Can you give me two three minutes like I know the company I haven't made. Give me two three minutes. I can cover discussion. Sure. Yeah, we can come back to learn uh and do a high level review and maybe I'll also set it up before I do that. Uh maybe Rohit, what is your plan for next week? This week what are you planning to apply? I know you went with Anundita, right? So do you plan to put Anuda into current infra or like or also thinking about Satwa? What is the plan? >> So see personally I am not very excited about Satwa. I know there is uh this uh

1:04:36 this web pro element is there but that's no guarantee. We had that elegance recently which did nothing uh and actually listed down and went further down and I think satwa is actually very expensive for anme. So their capabilities are mostly in water supply which is the lowest tier. Uh they're getting a little bit into this treatment plant and all but it's like there was this other company BBIP which came sometime back which now trade at 12 13p. Uh the main board like an EMS trades at 15 16 times. Uh a very very fast growing environ trades at 20 something like early 20s. So there's no uh this this this guy's capability is nowhere there. So I am honestly very negative on it. negative from a pricing standpoint. I if at all it gives a pop, I don't think the

1:05:22 pop will sustain and it will die. So if there are funds, I will apply and exit immediately. Uh so I I I'll take a call whether to apply or not at the end. Current infra at least has left something on the table relative to the segment. Uh so that that's probably the only one I'll apply for this week. N is a N is a state avoid actually also you know some of these that come with a one year forward multiple don't always list that well uh like like Vikram Solar is a good example this uh uh what was the other one that came MBEL is a good example these both listed very weak because on a trailing basis they don't look that strong so if you want to make a position you can just

1:06:08 buy it on listing it at probably flat and if the market is bad probably lesser also. So, Vikran looks more like a post listing kind of move list and run if if it is actually trading at 20 times forward. Again, Transal is a company I know well. I've held it for a very long time and it has eventually paid off but it took a long time for the market to uh you know actually beat rate it like its peers whereas this guy is coming exactly at that valuation. So, I'm a little tentative about Vikran also. I really like how you're saying six months as long term is absolutely nothing like if it's getting in six months what else

1:06:55 everything will just keep us >> yeah 6 months is absolutely nothing if a stock is moving 60% in six months >> that is insane. >> Good. I mean that is the rating you want. I mean that is that was why trans was attractive. Uh some of these don't give you rerating. They'll give you earnings growth which is you wait 6 months and probably you'll get 25 30%. Obviously is is okay but not what you're not not what you're hunting for. Yeah. >> Got it. Got it. With that let me move forward to enlon. Uh it's a 120 cr IPO from Interactive Financial. Just setting it up. It's a chemical manufacturing company engaging pharma intermediaries

1:07:40 and active pharmaceutical ingredients APIs. Company did a top line of 120 crores in FI25 and a bottom line of 20 crores. The market cap is 483 crores. So it's coming at 24p traing that is uh with respect to in-law healthcare. So with that then can you now take up and >> so I'll just tell I have like prepared in 2 minutes so I am going to miss on like 20 30% and uh I might give a very brief I would say descriptive analysis in the final verdict hope I get the time for it. So analon healthcare is a Raj code based chemical manufacturer which is engaged in the production of high purity pharma

1:08:27 intermediates API which is advanced pharmaceutical ingredients neutrautical APIs personal care APIs and veterinary which is your like you know animal care APIs the this APIs and the you know intermediates are used in the preparation of finished dosage formula which is your FDF. The company is one of the few manufacturers of laxoprofium uh sodium dehydrate which is a very important and notable notable API which is for pain inflammation which is caused due to your arthritis, back pain, frozen shoulder etc etc. So I'll just give the revenue breakup the finished dose formula formulas which is like FDF contribution to 63% API contribution to 27% neutrauticals for 9.5% like 0.5% for the

1:09:13 animal care. So the company currently has 65 commercialized products 28 at the pilot stage and 49 in the laboratory stage. Uh the company's earing 121 crores out of which the company's embarking 30.7 crores for the capex uh raising 43 crores for the working capital debt repayment for 5 crores and GCP of 42 crores. So again 35% of the IPO is GCP the biggest I don't understand why always the GCP is the highest one. Coming on its financials, the company did a revenue of 113 crores and a pat of 5.8 crores. In FY24, the company did a revenue of 66.7 crores and pat of 9.7 cr. So it has been like roughly roughly 40% decrease in the revenue. In F25, the company did a

1:10:00 revenue of 120.5 crores which is I would say they go 25 24 versus 25 looking would be less relevant. I'll tell you the reason 23 to 25 they have done like 5% kind of a growth and pat was like astonishing 20.5 cr just before the IPO.

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