Aartech IPO Closes on March 18: Should you invest?

After a long overhaul and unsteady political conditions, now it seems the Indian firms are returning back to the equity market to raise funds, but the sentiment remains cautious ahead of the elections starting in April.  Amidst all these noises, Aartech IPO has opened on 12th March, 2019.

Aartech Solonics

Aartech Solonics Limited is a solution- oriented enterprise that is involved in the manufacturing of electronic distribution and control apparatus (switches, fuses, voltage limiters, junction boxes, etc.) for a voltage not more than 1000 volts, boards, panels, cabinets, and other bases  used for power stabilization.

Some of its famous products and services entail BTS 2000, Kranking Ultra Capacitors, Control Rely Panels, Load Checkers. The company is also engaged in offering services for products of different companies like GSUN Innovations, Bestcase Enclosures.It’s client base varies from Defense, Railway, Power Generation, Oil and Gas, Moving Equimpments, to name a few.

The company has 55 full time employees and 10 contract employees.

Objectives of the IPO

The company wants to raise an IPO to

• To invest in its wholly owned subsidiary company M/S AIC Aartech Solonics Private Limited (Rs 200 lakhs), investment in M/S Faradigm Ultra capacitors Private Limited (Rs 250 lakhs)
• To fulfill its general corporate expenses that amount to Rs 120 lakhs
• To fulfill the working capital requirements Rs 100 lakhs
• To meet its public expenses amounting to Rs 50 lakhs

Aartech IPO Details

The size of the IPO will be 21.2 lakh equity shares with a face value of Rs 10. Here are the tabulated details

Open Date:	Mar 12 2019
Close Date:	Mar 18 2019
Total Shares:	2120000
Face Value:	₹ 10 Per Equity Share
Issue Type:	Fixed Price Issue IPO
Issue Size:	7.2 Cr.
Lot Size:	4000 Shares
Issue Price:	₹ 34 Per Equity Share
Listing At:	BSE SME
Listing Date:	Mar 27 2019

Financial Performance

The company’s total revenue has been decreased from Rs 1342.05 lakhs in the financial year ended March 31, 2017 to Rs 1208.50 in the recent financial year. The total assets have undergone a downward spiral from Rs 1945.78 lakh to Rs 1938.08 lakhs.

Particulars	For the FY March 31,2018	For the FY March 31, 2017	For the FY March 31, 2016	For the FY March 31, 2015	For the FY March 31, 2014
Total Revenue	1208.50	1342.05	1025.84	994.35	953.79
Total Assets	1938.08	1945.78	1872.11	1922	1804
Profit After Tax	117.58	30.09	22.81	112.62	70.41
Earning per share	2.38	0.61	0.46	Not Available	Not Available

It is interesting to note that despite muted profits, the company’s profit after tax figures has increased tremendously and this can be a cause of suspicion.

Should you invest?

The company has huge domain expertise coupled with high operating margins and R&D, but its inconsistent performance, small market size, no alternate source of funds and its high growth rate indicates that the aggressive investor should only invest in this IPO. Moreover, the primary market is witnessing a steep slowdown and it will gather pace after the election results. So, if you have a high risk- appetite, invest in it.