Transpact Enterprises Ltd IPO Review: Should you Invest?

Transpact Enterprises Ltd IPO has planned to raise Rs.1.35 crore through this fixed price issue. The company is  a biotechnology startup, based in Mumbai. The Company is promoted by Mr. Aslam Khan and Mr. Anis Choudhary. Post IPO the share holding of the promoters will be 73.11%, currently it is 100%.

The Company plans to partner with hospitals therapy centers, rehabilitation center and special children school for the installation of its products.

Transpact Enterprises Ltd

The company has user friendly device with unique features. They are into designing, development and of therapeutic device, ‘Vestibulator’ a unique and innovative design in medical device segment. Vestibulator has been incubated at SINE (Society for Innovation and Entrepreneurship), lIT Bombay.

The company has signed a licence agreement with IIT Bombay to carry out all commercialization activities. Further, the company and IIT Bombay has filed a joint patent for the technology of Vestibulator with Controller General of Patents, Designs and Trademarks, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry

• The technical foundation is expected to offer customized device
• The customers of the company are assured to get quality and certified device
• The company is an ISO 13485:2016 certified company for “Medical Devices” and ISO 9001:2015 certified for quality management system and its Vestibulator device is CE certified.
• The company outsources its production to third party provider. This is with the help of Rehab-Soft, Electronic Medical Records (EMR) processing, device administration, communications and streamlines patient billing.

Transpact IPO Detail

The utilization of proceeds from the IPO are:

Rs 28.59 lakhs for Redemption of Preference Shares

Rs 75 lakhs for buying R&D facility & Office Space on a long term basis.

Rs 1.97 lakhs will be allocated for general corporate purpose

Rs 29.64 lakhs would be used to meet up the IPO related expenses

• Issue Open: August 26th, 2019 – August 28th, 2019
• Issue Type: Fixed Price Issue IPO
• Issue Price: Rs 130 Per Equity Share
• Issue Size: Rs 1.35 Cr (104,000 Eq shares of Rs.10)
• Minimum Order Quantity: 1000 Shares
• Listing At: BSE SME
• Listing Date: September 6th 2019

Should you Invest?

The company has reported negative earnings for the last three fiscals and the IPO is priced exorbitantly. Company has posted an average EPS of Rs. – (2.60) and an average RoNW of -(28.17%) for the last three financial years. The investors may “avoid” this IPO.