Trom Industries Limited

Trom Industries Limited is a Solar EPC (Engineering, Procurement, and Construction) company specializing in residential solar rooftop, industrial solar power plants, ground-mounted solar power plants, and solar street lights. Additionally, the Company extends the services to include the Supply and Installation of solar street lights for public and commercial areas. The business encompasses engineering design, procurement of materials, on-site construction, project management, and adherence to regulatory standards across various sectors. Also, the business operations encompass the extensive trading and distribution of a diverse range of products, including solar panels, inverters, and an array of materials intricately connected to the establishment and functioning of solar power plants. They are actively engaged in the development of green hydrogen projects as a pivotal aspect of the future business endeavours. The warehouse is located at G.I.D.C Electronics Estate, Gandhinagar, Gujarat, India. As per financial performance, Trom Industries Limited has posted total income / net profits of Rs 30.56 Cr / Rs 0.35 Cr (FY22), Rs 24.13 Cr / Rs 0.28 Cr (FY23) and Rs 54.54 Cr / Rs 5.72 Cr (FY24). So as per previous financials data, company has shown good growth, but sudden rise in net-profit just before IPO, higher inventories raises some doubts. Company has posted an average EPS of Rs 5.06 and average RoNW of 45.95% for last three fiscals. Issue is priced at a P/BV of 6.08 as per NAV of 18.9 as on 31.03.24. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 293.89, 366.39 and 18.46 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Expert Global Consultants Private Limited is associated with this SME IPO and handled 10 SME IPOs in last 3 years. From last 10 SME IPOs, one opened below issue price and remaining above or at par on the day of listing. As of now from last 10 SME IPOs, three are trading below issue price and remaining above issue price. ( As on 23.07.24 ) As per financials, Trom Industries Limited has shown good growth, RoNW is 77.82% and P/E is respectively 293.89, 366.39 and 18.46 as per FY22, FY23 and FY24 earnings. So, issue looks fully priced, but sudden rise in net-profit and inventories raises some doubts. Company is engaged in the business of solar, which is highly fragmented and competitive business segment. Performance of BRLM is good. So, we give "SUBSCRIBE FOR LISTING GAINS" rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Jignesh Patel
• 2 Pankaj Pawar