KPI Global Infrastructure IPO Opens on 08th December, Should you Invest?

KPI Global IPO plans to raise Rs 39.34 Cr through the issue of 4,992,000 Equity Shares with a Minimum Application of Rs. 1,28,000/- The issue and the net issue will form 27.63% & 26.25%, respectively, of the post issue paid up equity share capital of company

KPI Global Infrastructure is into the generation of solar power. The company operates as an Independent Power Producer (IPP) under the brand name of ‘Solarism’ and as Captive Power Producer (CPP). The company builds, owns, operates and maintains grid connected solar power projects as IPP and gets revenue by entering into Power Purchase Agreements (PPA) with third parties for selling power units generated through its solar projects.

The lead manager to the issue is Vivro Financial Services Private Limited and the Registrar to this issue is Bigshare Services Private Limited .

KPI Global Infra Profile

• The company plans to increase its solar power generation capacity by setting up another solar power project for 25 MW at Sudi, Samiyala & Tanchha village, Amod, Bharuch, Gujarat at an estimated cost of about INR132 cr and with proposed date of commercial commencement in July 2019. Post the commercial commencement, our total solar power generation capacity would increase to 40 MW.
• The company have entered into bilateral PPA’s for a duration of 3 years with reputed industrial consumers such as Mafatlal Industries Limited (for their two units located at Navsari and one unit located at Nadiad), Best Paper Mills Private Limited (for their two units located at Vapi) and Meghmani Organics Limited (for their three units located at Dahej, Ankleshwar and Panoli) for direct sale of the solar power generated at the Solarism Plant. The rate of the PPAs are currently at around Rs. 6.58 per unit, which have been priced to arrive at an average of around 7% discount to the prevailing per unit price of the power rates of the DISCOMs, less other adjustments.

KPI Global IPO Deatils

The objects of the IPO are:

1. The funds raised will be used to part finance setting up a 25 MW Solar Power Project at Sudi village, Samiyala village, Tanchha village, located in Amod Tehsil in Bharuch District of Gujarat – INR34.59 crore
2. Offer related expences- INR3.54 crore and General expences of the corporates – INR1.80 crore

Other IPO Detail

• Issue Open: January 8th, 2019 – January 11th, 2019
• Issue Type: Fixed Price Issue IPO
• Issue Size: 4,992,000 Equity Shares of Rs 10 aggregating up to Rs 39.34 Cr
• Issue Price: Rs 80 Per Equity Share
• Market Lot: 1600 Shares
• Minimum Order Quantity: 1600 Shares
• Retail Allocation:50%
• Listing At: BSE SME
• Listing Date: January 22, 2019

Should you Invest?

For FY18, FY 17 and FY 16, its revenue from operations was Rs. 3,159.89  Lakhs, Rs. 2,602.09 Lakhs and Rs.2,751.12 Lakhs, respectively representing growth of  21.40% from the FY 2018-17 to FY 2016-17. For FY 18, FY 17 and FY 16 the company has posted the net profit of Rs.756.91 Lakhs, Rs. 1,011.03 Lakhs and Rs.1,069.46 Lakhs, respectively .

During the financial year 2017-18 the Other Income of the company rose to Rs.4.35  Lakhs compared to Rs. 26.06 Lakhs for the financial year 2016-17 .

As per DRHP, the company does not have any Peer. The investors that are risk averse should only “subscribe” to KPI Global IPO.