About TechEra Engineering IPO

Incorporated in 2018, TechEra Engineering (India) Limited designs, manufactures and supplies precise tooling and components for the aerospace and defence industries. The company also provides automation system solutions. TechEra makes assembly tools, jigs, fixtures, maintenance and repair tools, ground support equipment, and precision machined components. It uses advanced manufacturing technologies, such as 5-axis machining and 3D modelling, to meet the needs of its target sectors. The company has been certified for ISO 9001:2015 and ISO 14001:2018, reflecting its adherence to quality management systems. As of September 2024, the company employs 177 full-time qualified professionals.

The Objectives of the Issue

TechEra Engineering Limited intends to utilise the Net Proceeds from the Issue towards the following objectives:

1. Funding capital expenditure for the purchase of new machinery
2. Funding working capital requirements of the Company
3. Prepayment or repayment of a portion of certain outstanding borrowings availed by the Company
4. General corporate purposes
5. Issue expenses

Highlights of TechEra Engineering IPO

TechEra Engineering IPO is set to launch with a book-built issue of ₹35.90 crores. The issue is entirely fresh. Here are the key details of the IPO:

• The IPO opens for subscription on 25th September 2024 and closes on 27th September 2024.
• The allotment is expected to be finalised on 30th September 2024.
• Refunds will be initiated on 1st October 2024.
• Credit of shares to Demat accounts is also expected on 1st October 2024.
• The company will tentatively list on NSE SME on 3rd October 2024.
• The price band is set at ₹75 to ₹82 per share.
• The fresh issue comprises 43.78 lakh shares, aggregating to ₹35.90 crores.
• The minimum lot size for the application is 1600 shares.
• Retail investors need to invest a minimum of ₹131,200.
• The minimum investment for HNI is 2 lots (3,200 shares), amounting to ₹262,400.
• SKI Capital Services Limited is the book-running lead manager for the IPO.
• Kfin Technologies Limited serves as the registrar.

TechEra Engineering IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 27th September 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors are advised to complete their applications well before this deadline to avoid any last-minute technical issues or delays.

TechEra Engineering IPO Issue Details/Capital History

TechEra Engineering IPO is scheduled from 25th September to 27th September 2024, with a price band of ₹75 to ₹82 per share and a face value of ₹10. The total issue size is 43,77,600 shares, raising up to ₹35.90 crores through a fresh issue. The IPO will be listed on NSE SME. The pre-issue shareholding is 1,21,43,325 shares.

TechEra Engineering IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:

Investors can place bids for a minimum of 1600 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: TechEra Engineering Ltd

Strengths:

• Specialized expertise in aerospace and defense manufacturing
• Advanced technical capabilities including 5-axis machining and AR/VR for design
• Experienced leadership team with significant industry experience
• Quality certifications and recognitions from reputable organizations

Weaknesses:

• Market dependence on aerospace and defence sectors
• Capital intensity of maintaining and upgrading technology
• Regulatory complexity in the defence and aerospace sectors
• Single facility dependence introducing operational risks

Opportunities:

• Potential for market expansion into emerging markets and sectors
• Technological innovation in Industry 4.0, IoT, and automation
• Possibilities for partnerships and collaborations
• Increased global defence spending and aerospace sector initiatives

Threats:

• Intense competition in the aerospace and defence manufacturing sector
• Risk of technological obsolescence requiring continuous investment
• Geopolitical risks affecting demand for aerospace and defence products
• Economic conditions potentially reducing spending in target sectors

Financial Highlights: TechEra Engineering Ltd

Below are the financial results for the Fiscal years FY24, FY23, and FY22:

TechEra Engineering Limited has shown significant growth in recent years. The company's revenue increased by 47%, and profit after tax (PAT) rose by 270% between the financial year ending with March 31, 2024 and March 31, 2023.

Assets have shown strong growth, increasing from ₹2,136.23 lakh in FY22 to ₹3,723.90 lakh in FY24, representing a growth of about 74.3% over two years.

Revenue has seen substantial growth, rising from ₹736.74 lakh in FY22 to ₹3,907.66 lakh in FY24, an impressive 430.4% increase over two years.

The company's profitability has improved significantly, turning from a loss of ₹628.70 lakh in FY22 to a profit of ₹482.25 lakh in FY24, representing a substantial turnaround in financial performance.

Net Worth has shown steady growth, increasing from ₹977.84 lakh in FY22 to ₹1,590.14 lakh in FY24, a growth of about 62.6% over two years.

Total Borrowings have increased from ₹887.05 lakh in FY22 to ₹1,429.98 lakh in FY24, representing an increase of about 61.2% over two years. This increase in borrowings, coupled with growing assets and revenue, suggests that the company is in an expansion phase.

The company's financial performance shows a trend of strong revenue growth and a significant improvement in profitability. The turnaround from loss to profit is particularly noteworthy. When evaluating the IPO, investors should consider these positive trends along with the company's growth strategy and the evolving aerospace and defence market.