Falcon Technoprojects India Limited

Falcon Technoprojects India Limited is an ISO 9001:2015 certified company engaged in the business of providing Mechanical, Electrical and Plumbing ('MEP') services to the PAN India customers which are operating in various sectors including Petroleum Refineries, Residential Townships, Atomic Energy, Civil Construction, etc.  Mechanical, Electrical, and Plumbing ('MEP') services refer to installation services that provide comfortable spaces for building occupants. These services specifically deal with the design, selection, and installation of the integrated Mechanical, Electrical, and Plumbing systems. It includes installing air-conditioning systems, power and lighting systems, water supply and drainage, fire prevention and fighting systems, and telephones. By integrating these separate systems into one, the operation can be made more energy effective. The design of MEPs is important for planning, decision-making, accurate documentation, performance and cost estimation, construction, and ultimately the facility’s operation and maintenance. MEP services specifically cover the in-depth design and selection of these systems, rather than simply installing the equipment. Some of the marquee clients of the company includes Mumbai International Airport, L&T, BPCL, HPCL, Lodha Developers, Reliance Industries Limited and Shapoorji Pallonji Group. As per financial performance, Falcon Technoprojects India Limited has posted total income / net profits of Rs 9.46 Cr / Rs 0.29 Cr (FY21), Rs 22.90 Cr / Rs 1.02 Cr (FY22), Rs 16.56 Cr / Rs 1.03 Cr (FY23) and Rs 10.36 Cr / Rs 0.86 Cr (upto 31.01.24 FY24). So as per previous financials data, company has shown zig-zag results with declining trends in sales. Company has posted an average EPS of Rs 2.72 and average RoNW of 34.25% for last three fiscals. Issue is priced at a P/BV of 2.17 as per NAV of Rs 42.33 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 47.96, 47.42 and 47.22 respectively, which looks aggressively priced. As per RHP, there is no listed peers. On BRLM's front, Kunvarji Finstock Private Limited is associated with this IPO and this is first SME IPO from the BRLM. As per financials, Falcon Technoprojects India Limited has shown zig-zag results with declining trends in sales, RoNW is 23.16% and P/E is respectively 47.96, 47.42 and 47.22 as per FY22, FY23 and annualised FY24 earnings. So, issue looks aggressively priced. Company is engaged in the business of providing Mechanical, Electrical and Plumbing ('MEP') services to the PAN India, which is highly competitive and fragmented segment. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Bharat Shreekishan Parihar
• 2 Mrs. Sheetal Bharat Parihar