Technofab Engineering to debut on the bourses on 16 July 2010

It had priced IPO at Rs 240 per share

Shares of Technofab Engineering (TEL) will debut on the stock exchanges on Friday, 16 July 2010. TEL had raised Rs 71.76 crore through an initial public offer (IPO) recently. The company had priced the IPO at the top end of Rs 230-240 per share price band. The IPO was open for bidding between 29 June 2010 and 2 July 2010. The IPO got bids for 3.81 crore shares and ended with 12.78 times oversubscription.

Technofab Engineering Grey Market Premium jumps

Company Name	Offer Price (Rs.)	Premium (Rs.)
Aster Silicates Ltd.	112 to 118	7 to 7.50
Technofab Engineering	230 to 240	28 to 29
Hindustan Media Ventures	162 to 175	6 to 7

Technofab Engineering IPO subscribed 12.2 times

Gets bids for 3.64 crore shares

The initial public offer (IPO) of Technofab Engineering has received strong investor response. The issue was subscribed 12.2 times. The IPO got bids for 3.64 crore shares, compared with 29.9 lakh shares on offer.

Grey Market Premiums - Aster Silicates, Technofab Engineering, Hindustan Media Ventures

Company Name	Offer Price (Rs.)	Premium (Rs.)
Aster Silicates Ltd.	112 to 118	8 to 8.50
Technofab Engineering	230 to 240	12 to 13
Hindustan Media Ventures	162 to 175	6.5 to 7

Technofab Engineering IPO Analysis

Focused on balance of plant packages

Undertakes projects in the power, oil & gas, water & wastewater treatment and other industrial & infrastructure sectors

Technofab Engineering (TFEL) is engaged in the business of providing engineering, procurement and construction (EPC) services on turnkey basis. The company undertakes execution of a wide range of balance-of-plant (BoP) and electro-mechanical projects in the power, oil & gas, water & wastewater treatment and other industrial & infrastructure sectors in both India as well as international markets. The company currently executes projects in 15 states in India as well as Kenya, Ethiopia and Fiji.

Technofab Engineering IPO Review

Those with a high risk appetite can consider investing in the initial public offer of small-sized Engineering, Procurement and Construction (EPC) services player, Technofab Engineering, with a two-year perspective. Strong growth in revenues and earnings over the last couple of years, low gearing, presence in lucrative segments such as nuclear power and water management are the key positives for this company. The offer price band of Rs 230-240 discounts the likely per share earnings for FY-11 by 7.6-8 times. The valuation is at a discount to comparable peers such as Hindustan Dorr Oliver and BGR Energy Systems.

Technofab Engineering IPO opens on June 29

Technofab Engineering Ltd. (TEL) has decided to open its Initial Public Offering (IPO) for subscription on June 29, and to close on July 2. Technofab Engineering has filed the Red Hearing Prospectus with the Registrar of Companies, NCT of Delhi and Haryana (RoC) to enter the capital markets with an IPO of 29,90,000 equity shares of face value of Rs.10 each for cash at a price to be decided through a 100% book-building process. The Issue comprises of a reservation of 50,000 Equity shares of Rs.10 each for eligible employees. The issue will constitute 28.50% of the post issue paid-up equity capital of the company. The net issue will constitute 28.03% of the post issue paid-up equity capital of the company.

The company is proposing the IPO to meet long term working capital requirements of Rs300mn, finance procurement of construction equipment for Rs162.38mn, finance setting up of maintenance and storage facility for construction equipment for Rs49.95mn, setting up training centre for employees for Rs54.07mn and balance for general corporate purposes. Fitch Ratings India has assigned a grade of ‘3 (ind)’ out of a maximum of ‘5 (ind)’ to the proposed IPO of TEL. The grade indicates the average fundamentals of the issue relative to other listed equity securities in India. TEL is engaged in the business of providing Engineering Procurement and Construction (EPC) services, and executing a wide range of Balance-of-Plant (BoP) and electro-mechanical projects on a complete turnkey basis.