Thaai Casting Limited is a distinguished automotive ancillary company with IATF 16949:2016 certification, specializing in High-Pressure Die Casting, as well as the precision Machining of both Ferrous and Non-Ferrous materials and Induction heating and quenching. Founded by Mr. Sriramulu Anandan, a seasoned professional with extensive expertise in Pressure Die Casting and Machining Processes, the business model is firmly rooted in a B2B approach, catering to leading entities in the automotive components sector. The product portfolio encompasses a diverse range of Automobile components, including Engine Mounting Support Brackets, Transmission Mounts, Fork Shift and Housing, Armature – Steering Wheel, Electrical Connectors, YFG Base Frame (Right-hand drive side/Left-hand drive side), Housing, Top Cover, and more. In recognition of the commitment to environmental sustainability, they proudly received the MSIL-GREEN Certification from Maruti Suzuki India Limited in 2021. This acknowledgment underscores the dedication to adopting and promoting eco-friendly practices within the operations. In 2022, the company was honoured with prestigious awards from industry leaders such as Hanon and RSB, recognizing the excellence in terms of Best Quality and being a standout Vendor. As they continue to evolve and uphold the highest standards in the manufacturing processes, they remain steadfast in delivering top-notch products and services to the valued clientele in the automotive sector. The Company was originally formed as a Partnership Firm under the Partnership Act, 1932 having Firm Registration Number FR/Chennai South/1102/2010 in the name and style of “Thaai Casting” pursuant to Deed of Partnership dated June 02, 2010. Subsequently the firm was converted from Partnership firm into a public limited company as per the provision of Part I Chapter XXI of the Companies Act, 2013 with the name and style of “Thaai Casting Limited” and received a Certificate of Incorporation from the Registrar of Companies, Tamil-Nadu and Andaman situated at Chennai dated June 12, 2023. As per financial performance, Thaai Casting Limited has posted total income / net profits of Rs 20.49 Cr / Rs 0.40 Cr (FY21), Rs 38.42 Cr / Rs 1.15 Cr (FY22), Rs 49.12 Cr / Rs 5.04 Cr (FY23) and Rs 28.89 Cr / Rs 5.57 Cr (upto 31.10.23 FY24). So as per previous financials data, company has shown zig-zag results. Also, trade receivables are around 64% of FY23 revenue and sudden rise in net-profit just before IPO is very surprising. Company has posted an average EPS of Rs 1.75 and average RoNW of 27.09% for last three fiscals. Issue is priced at a P/BV of 5.64 as per NAV of 13.65 as on 31.08.23. 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 154.33, 35.36 and 18.65 respectively, which looks aggressively priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Gyrcapital Advisors Private Limited is associated with this SME IPO and handled 20 SME IPOs in last 3 year. From last 20 SME IPOs, all opened above issue price or at par on the day of listing. As of now from last 20 IPOs, four trading below issue price and remaining are trading above issue price.( As on 12.02.24 ) As per financials, Thaai Casting Limited has shown good results, RoNW is 40.10% and P/E is respectively 154.33, 35.36 and 18.65 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. If company can maintain similar margin that need to be tracked. Company is engaged in automotive ancillary specializing in High-Pressure Die Casting, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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