Australian Premium Solar (India) Limited is one of the recognised brands in the solar industry, which is in the business of manufacturing of Monocrystalline and Polycrystalline Solar Panels and Engineering, procurement, and construction ('EPC') services thereof. The Company has modern manufacturing facility at Tajpur, Sabarkantha, Gujarat that helps in delivering quality and latest technology products in the industry. The products manufactured by the Company are used in residential, agricultural and commercial installations. The company is primarily engaged in the manufacturing of Solar Panels and EPC Services of solar systems. The industry term for solar panel is PV Module (Photovoltaic Module) which refers to setup for generating electricity from sunlight, using semiconductor materials in devices called photovoltaic cells or solar cells. Currently in the solar panel segment, they manufacture both monocrystalline and polycrystalline solar panels at the manufacturing facility spread across in 25,375 square meters, located at Sabarkantha, Gujarat having capacity of 200 MW per annum and capacity utilisation for FY23 was 13.69%. Post capital expenditure, total capacity will be increased to 600 MW per annum. They manufacture two types of solar panels: (i) Monocrystalline Solar Panel; and (ii) Polycrystalline Solar Panel. The difference between both lies in their integral raw material. They also provide installation services for solar panels and solar pumps. They undertake installation services under this segment for household and industrial end users, while also provide solar pump installation services for agricultural end users which enable to supply the manufactured solar panels along with solar pumps. Till August 31, 2023, they have served more than 10,000 unique customers towards installation of solar modules out of which more than 9500 has been roof top installation for residential use and more than 1300 solar pumps installation for agricultural use. As per financial performance, Australian Premium Solar (India) Limited has posted total income / net profits of Rs 74.44 Cr / Rs 1.80 Cr (FY21), Rs 98.33 Cr / Rs 2.70 Cr (FY22), Rs 94.96 Cr / Rs 3.33 Cr (FY23) and Rs 50.27 Cr / Rs 1.13 Cr (upto 31.07.23 FY24). So as per previous financials data, company has shown almost static sales, but profit growth. Company has posted an average EPS of Rs 1.97 and average RoNW of 23.17% for last three fiscals. Issue is priced at a P/BV of 5.02 as per NAV of 10.75 as on post issue. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 39.41, 31.97 and 31.39 respectively, which looks aggressively priced. As per RHP, comparison between peers is shown in above table. On BRLM's front, Beeline Capital Advisors Private Limited is associated with this SME IPO and handled 27 SME IPOs in last 2 years. From last 13 IPOs, all are opened above issue price on the day of listing. As of now from last 13 IPO, two are trading below issue price and remaining are trading above issue price. ( As on 06.01.24 ) As per financials, Australian Premium Solar (India) Limited has shown average results, RoNW is 23.05% and P/E is respectively 39.41, 31.97 and 31.39 as per FY22, FY23 and annualised FY24 earnings. So, issue looks aggressively priced. Company is in business of manufacturing Solar Panels and also EPC services, which is highly competitive and fragmented segment. The sector may see good growth in coming years. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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