Sintercom India Limited IPO Review | Sintercom India Limited IPO GMP

 

Sintercom India Background

Headquartered in Pune, Sintercom India Ltd. is into the business of manufacturing sintered metal products, machinery and the assembly of metal components. Such sintering process is used to manufacture medium to high density sintered automotive engine components, body chassis, powertrain, exhaust applications and transmission systems which are the parts essentially used in the assembly of commercial and passenger vehicles.

Established in the year 2007, the commercial production started in the year 2009 and currently, Sintercom India holds an ISO/TS 16949:2009 certificate issued from the DQS Holding GmbH, a Frankfurt-based Certification Company.

What is Sintering Technology?

Produced out of steel scrap, sintering technology is an eco-friendly method to produce the raw materials from which the end product is generated through the technology with minimal scrap. Powdered Metallurgy helps the scrap input coalesce into a solid mass, removing the moisture from the slurry through the heating process.

Development of such aspects has enabled the application of such technology in electrical, automotive, aerospace, energy, industrial, defence, medical, consumer and industrial markets.

Sintercom India Ltd. commenced its business with manufacturing ‘Hego Bosses’ and selling their product in India and globally to the Tier-1 automotive exhaust system manufacturing companies.

Currently, the company mainly targets the domestic OEM buyers in the automotive segment which has resulted in generating 87.98% and 79.74% of the total revenue from such operations for H1-FY 2018 and FY 2017 respectively.

The existing customer base of the company includes OEMs such as Maruti Suzuki Ltd., Fiat India Automobiles Pvt. Ltd., Tata Motors Ltd., Bajaj Auto Ltd. and Mahindra & Mahindra Ltd.

The company also has a dedicated in-house Research & Development department, wherein the research team thrives to develop new technology that can be applied in manufacturing engines, body chassis, and transmission systems for the OEMs and its Tier-1 customers.

Presently, the main focus of the company is in the manufacturing of high-strength structural sintered components of Engine & Transmissions.

Sintercom India Management

While investing in an IPO, it is highly important to have the knowledge of the promoter group as well as the management team which gives you an insight into the future prospects and growth of the company. A skilled, experienced and dedicated management team will always find multiple solutions to a problem while laying the path for the growth of a company and generating value to its investors and stakeholders.

Mr Jignesh Raval, a young and a dynamic personality, aged 47 years is the individual promoter and the Managing Director of the company.

He ventured in with BRN Industries Ltd. and MIBA Sinter Holding GmbH & Co. KG which are the corporate promoters of the company.

Talking about experience, the corporate promoter MIBA Sinter Holding GmbH & Co. KG, a part of the internationally recognized MIBA Group, possesses a background of more the five decades in the sintering technology and has created an established position for itself in the market.

Other management team members from Sintercom India Ltd. includes Mr Hari Nair (Non-Executive Director and Chairman) and Mr Herald Neubert (Non-Executive Director).

While the background of the management team is important, the holding pattern of such promoters is equally important for a high promoter holding indicates personal interest in the company.

The respective stakes of the promoters and the cost of average acquisition are as under:

 

Sintercom India Limited IPO – Data Points

The company has a wide-range of product offerings that also features customization. The existing product line caters to the widely established OEMs which is applicable in various systems of manufacturing passenger and commercial vehicles. A few products to mention used by the OEMs include Engine Gears, Timing Belt Pulleys, Exhaust Sensor Hego Boss, Sprockets, Engine Sensor parts, Synchronizer Hubs, ABS Sensor Rings etc.

Also, the track record of one of the corporate promoters, MIBA Sinter Holding GmbH & Co. KG has an established presence in the market with an experience of over five decades. It is the global manufacturer of high precision parts. Thus, the technological know-how along with a significant presence in the market helps the company in transferring technology from the MIBA Group while giving Sintercom India, a competitive edge over the other players in the market.

Sintercom India IPO is categorized under an SME IPO and the offer comprises of a Fresh Issue of Shares and an Offer for Sale from the Selling Shareholders for an issue of 85,46,000 shares aggregating to ₹55.54 crore at the upper range of the price band.

Investors can bid for a minimum 2000 equity shares amounting to a minimum application of ₹1,30,000

Other details for the Sintercom India Limited IPO are provided below in IPO details section.

 

Sintercom India Ltd – Financials

Below is an overview of the company’s financials. While categorized as an SME company, the revenue of the company shows growth over the period while profits have increased multifold in the financial year 2015-’16 and 2016-’17 which shows a promising performance by the company in the future.

The detailed income statement of the company from the past few years is as under:

 

While the profitability of the company has increased over the years, it has a stable financial performance, however, a low EPS indicates the company might have a lower payout ratio in terms of distributing dividends to the investors. However, it shows an increasing trend which is again for the benefit of the shareholders.

While the financial performance is steady, here are a few other metrics which would help you analyze the financial health of the company along with the justification of the valuation:

 

Note: The above ratios are calculated based on the financial performance of the year F.Y. 2017

Sintercom India Limited IPO Details

The Offer comprises of Fresh Issue of shares by the Company and an Offer for Sale by the Selling Shareholders.

The IPO falls under the low price range as it is categorized as an SME IPO. Investors interested in bidding for the Sintercom India IPO can apply through the IPO ASBA system from 5th February to 7th February.

Once the allotment is out if you have received a successful allotment, the application money blocked using ASBA will be debited from your bank account and the shares would be credited to your demat account. While in case of an unsuccessful allotment, the blocked application money would be unblocked on the same day.

Let us understand the details of OFS of the company:

The selling shareholders to the issue include:

• Victoria Stock Invest Private Limited: 10,31,213 shares (Full Exit)
• Maurill Industries Limited: 24,98,787 (Full Exit)

Let us understand the stakeholding of the promoters prior to and after the issue:

 

Sintercom India Contact Information:

For any complaints or clarifications regarding Sintercom India IPO, you can get in touch with the Sintercom India team at the following contact details:

Sintercom India Ltd.

Gate No. 127, At Post Mangrul
Taluka Maval, Talegaon Dabhade
Pune – 410 507
Tel: +91 2114 661200
Fax: +91 2114 661202
Email: investor@sintercom.co.in

Sintercom India IPO Registrar:

Link Intime India Private Ltd,
C-13 Pannalal Silk Mills Compound,
LBS Marg, Bhandup West, Mumbai 400078
Tel: +91-22-25963838
Fax: +91-22-25946969
Email: sintercom.ipo@linkintime.co.in

 

The Lead Manager to the issue is:

Pantomath Capital Advisors Private Limited

406-408, Keshava Premises,
B/h Family Court
Bandra Kurla Complex, Bandra East,
Mumbai – 400 -051, Maharashtra, India
Tel: +91 22 6194 6700
Fax: +91 22 2659 8690
Email: ipo@pantomathgroup.com

 

Sintercom India IPO Recommendation:

There has been a consistent increase in the demand for sintered products in the auto and related industries. This issue from Sintercom India limited certainly looks a good contender for a long-term investment.

Returns will be at an average level if you are someone who is looking for a short-term quick profit.

Read: 50+ IPOs coming in 2018

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* The recommendation is just our viewpoint and you are advised to check with your financial advisory and/or stockbroker before investing any money in this IPO. A Digital Blogger bears no responsibility in such investments and the corresponding profits/losses.

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