ANB METALCAST SME IPO BUSINESS REVIEW. 🌟AVOIDED. Comes at tight valuation. Long gestation period for expansion & Very Common Products (70% Rev) The company was set up in 2019 near Rajkot. It manufactures Aluminium extrusion products like channels, sections, flat bars etc. It has 7800MTPA capacity and operates at 78% utilization level. 🩷LIKE, READ FULL REVIEW & DECIDE
This business review is based on DRHP/RHP filed by the company at Exchange & is based on reviewer’s understanding of the documentation. For a full understanding of risks, financials, objectives & prospects suggest to go through the RHP in detail & form own opinion.
OBJECTS:
Out of Rs.49.92Cr Raised, Rs.13.7Cr for capex and Rs.21.5Cr for working capital and rest for general and trading expenses
The capex is for civil works, adding an Aluminum Melting Cum Holding Furnace and an Aluminum billet Homogenizing Furnace, each of 20MT capacity per Batch
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Trial run is planned in Q3Fy27 👎only since Civil work has to be done in existing plant by creating another floor.
BUSINESS & PROSPECTS:
The capex is long duration primarily because civil work has to be done at operational plant by creating another floor, This can hamper operations even if executed slowly. Company also plans to shift some machinery from ground floor to new floor.
The extruded profiles (70% revenue) it makes, are widely available, as traded items. These are bought by fabricators from distributors / dealers to make window frames, railings, solar panel supports, kitchen shelf supports, door handles etc. 30% revenue is from motor frame and certain car motor parts.
VALUATION AND DECISION:
Rs.156 is at 18x its TTM earnings, on post IPO equity basis. Maan Aluminium (41p/e) is in similar business but is a very large company with >800Cr turnover. Century Extrusions (18x) is a good peer. Makes similar Aluminium profiles.
Considering very long gestation period (Trial run is planned in Q3Fy27 ) and disturbance to existing operation that could happen, during civil construction work, AVOIDING Now. (Also 70% revenue is from very commonly available, extruded profiles)
Suggest to assess by yourself and take your own decision, after further study, considering various factors discussed and any other info available.
Images: P&L, SEGMENTS 🩷LIKE 🔖 BOOKMARK ANB METALCAST SME IPO