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Face Value: Rs 10 Pennars core product, i.e. pre-engineered buildings, is steel buildings which are custom
designed and fabricated in its manufacturing facility under strict quality control at every level
Book value: Rs 41.43. (Mar 31, 2015) of production and as per detailed designs created by it and approved by its customers. In
addition to its core manufacturing activities for pre-engineered building systems, its operations
Bid size: - 80 equity shares and in
also include (i) design, supply and erection of solar module mounting structures for solar
multiples thereof
energy parks; (ii) design, manufacturing, supply and assembly of commercial buildings such as
100% Book built Issue high-rise buildings, multi-level car-parks, low cost housing and other structural steel products;
and (iii) cold form structures like schools, low cost housing. It also provides design and
Capital Structure: * engineering services to the customers using advanced software platforms.
Pre Issue Equity: Rs. 31.02 cr
Post issue Equity: Rs. 34.28 cr PEBSL has a non-exclusive technical know-how licensing arrangement with NCI Group, Inc., an
established player in the United States metals buildings market, for supply of standing seam
Listing: BSE & NSE roofing panel system in India under the brand name Double Lok. It is one of the few
companies that offer leak-proof roofing systems in India in addition it has also entered into a
Lead Manager: Motilal Oswal Investment design services out-sourcing agreement with a U.S. based entity engaged in a business similar
Advisors Pvt Ltd, Axis Capital Ltd, Karvy to it, pursuant to which Pennar offers its design and engineering services to them by using
Investor Services Ltd their software for manufacturing of pre-engineered buildings by them for their overseas
customers.
Registrar to issue: Karvy Computershare
Private Limited Its manufacturing facility, which is spread over an area of 35 acres and 271/2 guntas is located
at Ankenpally Village, Sadashivpet in the State of Telangana on the Hyderabad-Mumbai
Shareholding Pattern
National Highway (NH-9). It is equipped with high-precision machines to fabricate and supply
Pre issue * Post issue quality-replete steel buildings and has a production capacity of 90,000 MT per annum of
Shareholding
Pattern % % fabricated structural metal products a year.
Promoters & 69.13 62.56 In Fiscal 2012, 2013, 2014 and 2015, revenues from operations (gross) were Rs 2,686.05
Promoter Group million, Rs 3,131.65 million, Rs 4,022.37 million and Rs 4,867.89 million, respectively. In Fiscal
Public (incl 2012, 2013, 2014 and 2015, profit after tax, as restated were Rs 105.81 million, Rs 147.64
institutions & 30.87 37.44 million, Rs 172.16 million and Rs 219.77 million, respectively. As of June 30, 2015, it had 156
employees) ongoing projects across 20 states in India at various stages of execution aggregating to a total
Total 100.0 100.0 order value of Rs 3,561.87 million.
RETAIL RESEARCH
Objects of the Fresh Issue
Repayment/ prepayment, in full or part, of certain working capital facilities availed by the
Company
Financing the procurement of infrastructure (including software and hardware) for the
expansion of its design and engineering services; and
General corporate purposes.
Requirement of funds and Utilisation of Net Proceeds Rs in Million
Particulars Amount proposed to Fiscal Fiscal Total
be funded from the Net 2016 2017
Proceeds
Repayment/ prepayment, in full or part, of certain borrowings availed by the 340 340 - 340
Company
Financing the procurement of infrastructure (including software and hardware) for 80 40 40 80
the expansion of its design and engineering services
General corporate purposes * * * *
Competitive Strengths:
Business Strategy:
Key Concerns:
PEBSLs business is dependent on a few customers and the loss of, or a significant reduction in purchases by such customers could
adversely affect the business.
PEBSL is dependent on a few suppliers for its raw materials. Any failure by its suppliers to make timely delivery of raw materials will
affect its business.
PEBSL technology know how license arrangement with NCI Group, Inc. is on a non-exclusive basis
The inability of its design and engineering team to design the product in an efficient manner may lead to reduced margins.
PEBSL is affected by the prices, availability and quality of its raw materials used in its production
PEBSL depends on the performance by its building contractors for timely completion of its projects.
An inability to compete effectively may lead to a lower market share or reduced operating margins.
PEBSL has only one manufacturing facility.
Delays or defaults in customer payments could adversely affect PEBSLs financial condition.
The trademarks being used by PEBSL for its business are not registered and its inability to obtain this registration may adversely
affect its competitive business position.
Projects included in order book may be delayed, modified or cancelled, which could harm PEBSLs cash flow position, revenues and
income.
PEBSL may be affected by the level of business activities and financial performance of its customers, in particular its major
customers.
PEBSL has in the past encountered delays in the implementation and execution of its projects.
RETAIL RESEARCH
Latent defects in PEBSLs products may increase its after sales cost or it may suffer losses on account of replacements/ product
recalls.
If PEBSL is unable to borrow funds (including at short notice) to meet its working capital requirements, there may be an adverse
effect on its results of operations
PEBSLs ability to expand in North America is limited due to its contractual arrangement.
Operations are dependent on a large pool of contract labour and an inability to access adequate contract labour at reasonable costs
may adversely affect PEBSLs business prospects and results of operations.
Labour disputes could affect PEBSLs operations.
Operations of PEBSL expose it to the risks of currency exchange rate fluctuations.
PEBSL could be adversely affected if it fails to keep pace with technical and technological developments.
HDFC Securities Limited, I Think Techno Campus, Bulding B, Alpha, Office Floor 8, Near Kanjurmarg Station Opp. Crompton Greaves, Kanjurmarg (East),
Mumbai 400 042 Fax: (022) 30753435 Website: www.hdfcsec.com
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information contained herein is from sources believed reliable. We do not represent that it is accurate or complete and it should not be relied upon as such.
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category of clients, including, but not limited to, Institutional Clients
Disclaimer: HDFC Bank (a shareholder in HDFC Securities Ltd) is associated with this issue in the capacity of Bankers to the issue and will earn fees for its
services. This report is prepared in the normal course, solely upon information generally available to the public. No representation is made that it is accurate or
complete. Notwithstanding that HDFC Bank is acting for Pennar Engineered Building Systems Limited this report is not issued with the authority of Pennar
Engineered Building Systems Limited. Readers of this report are advised to take an informed decision on the issue after independent verification and analysis.
RETAIL RESEARCH