Atal Realtech Limited

Atal Realtech Limited, started in 2012 and based in Nashik - Maharashtra, is a construction company providing integrated civil works contracting and engineering services for structural construction and infrastructure sector projects and are a registered contractor with the Government of Maharashtra Public Works Department in Class I-A. The Company engages in contracting and sub-contracting for various government and private projects which includes construction of commercial structures and industrial structures. Majority of the construction activity being undertaken by us includes civil & structural construction and infrastructure contracts under sub contracting by main contractors, who have been allotted the project by a principle employer. Company's focus area includes:• Civil construction projects, which include structures such as sports complex projects (Indoor and Outdoor Sport Stadiums), multi-purpose hall, commercial structures, industrial structures, Hospitals, Cold Storages, Educational Institution, mass housing projects• Water Supply and Drainage Projects• Road and Bridges Projects• Major and Minor Irrigation Projects On the financial performance front, for the last three fiscals, Atal Realtech has reported turnover/net profits (loss) of Rs. 51.57 cr. / Rs. 2.32 cr. (FY18), Rs. 58.26 cr. / Rs. 2.12 cr. (FY19) and Rs. 58.69 cr. / Rs. 2.62 cr. (FY20). So company has shown almost static results. For the last three fiscals, company has posted average EPS of Rs. 5.45 and an average RoNW of 11.72%. The issue is priced at a P/BV of 1.20 based on its NAVs of Rs. 59.87 post issue. As per FY20 earnings, on fully diluted equity post issue, it is priced at P/E of 14. So as per FY20 earnings issue looks fully priced. As per RHP, comparison with listed peers is shown in above table. On BRLM's front two lead managers are associated with this IPO and they have handled 22 IPOs in last three fiscals. Out of last 10 listing, 3 opened below issue price and the rest with premiums ranging from 0% to 5% on the day of listings. As of now from last 10 IPOs, six are trading below issue price, and remaining above issue price. ( As on 29.09.2020 ) Company has shown average results and issue is priced at P/E of around 14 as per FY20 earnings, which is fully priced in current scenario. Growth opportunities in infrastructure development may be very high in BHARAT in future, but there is very tough competition and also current situation witnessing downturn with weak demand. So we give AVOID rating to this SME IPO.

• 1 MR. VIJAYGOPAL ATAL