BackPower Mech to launch IPO on 7 August, to raise up to `273 crore
The firm has set a price band of `615 to `640 per equity share
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Mumbai: Power Mech Projects Ltd, a power sector services company, will launch its initial public offer (IPO) on 7 August to raise up to ₹ 273 crore.
The Hyderabad-based firm has set a price band of ₹ 615 to ₹ 640 per equity share. The firm will be able to raise ₹ 273.2 crore at the upper band of the IPO and ₹ 162.5 crore at the lower band.
The issuance will involve sale of 2.12 million fresh shares, while private equity investor Motilal Oswal Private Equity’s India Business Excellence Fund I, along with two other shareholders, will sell up to 2.14 million shares as part of the offer. Motilal Oswal Private Equity invested ₹ 40 crore in the firm in 2009.
The issue will constitute 29.02% of the fully diluted post issue paid-up equity share capital of the company. The firm will use the proceeds to fund its working capital requirements and for general corporate purposes.
Founded in 2009, Power Mech is engaged in the business of providing engineering services to the power sector across three services. These include construction, testing and commissioning of boilers, turbines and generators.
It also provides operation and maintenance (O&M) services, which includes services such as annual maintenance contracts, other repairs, renovation and modernization for power plants.
A third business line for the company involves civil works for various civil and construction jobs for the main plant.
On 30 June, the firm’s order book stood at 3,406.2 crore, with 84% of the orders coming from India.
The firm’s revenues have grown at a compounded growth rate of 29% from 491.6 crore in financial year 2011 to 1,361.6 crore in 2015, while its net profit increased from 37.6 crore in 2011 to 71.4 crore in 2015.
“Going ahead, O&M will be the focus of the company as the margins in this segment are higher than that in construction," said S. Kishore Babu, chairman and managing director at Power Mech, adding that the contribution of construction to the firm’s revenue, which used to be as high as 90% earlier, is slowly coming down.
The firm has hired Kotak Mahindra Capital Co. Ltd, IIFL Holdings Ltd and Motilal Oswal Investment Advisors Pvt. Ltd to manage the offer.
So far this year nine firms have raised 4,377.1 crore through their initial public offers, according to data from primary market tracker Prime Database, more than that raised in the previous two years.
In 2014, five firms raised 1,200.9 crore, while in 2013, three firms raise 1,283.7 crore through IPOs. Also, so far this year, 24 firms have filed their draft IPO papers with the markets regulator Securities and Exchange Board of India.
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