The company is a leading manufacturer of Wind Turbine Generator (WTG) and is the sixth largest company worldwide as a WT manufacturer for the year ended December 2004 based on installed capacity. The company along with its associate companies is an integrated solution provider to wind energy in the Indian market.
The company is also involved in wind resource mapping, identification of suitable sites, technical planning for wind power projects and after sale O&M services for the WTGs that they provide. The company has got a market share of 44.5% for the fiscal ended March 2005 with India being the third largest market for wind energy in terms of installed capacity.
Financials
The turnover of the company has grown from Rs.5333 million to Rs.19659 million from March 31 2002 to 31 March 2005. The EPS for the year ended 2005 was Rs. 15 up from Rs.5.7 the previous year.
Indian Market for Electricity
India has been perennially short of electricity with the demand exceeding supply by 7.3% in terms of total requirement and 11.7% for peak demand. India with 355 kWh per capita electricity consumption is one of the lowest with china being 827 kWh, Brazil 1878 kWh and US 12331 kWh (2000).
The market for wind power is expanding and India is the third largest country
in the world with an installed capacity of 875 MW in 2004. This is expected to
grow to 8300 MW in 2009 representing a CAGR
of 22.6%.
The growth drivers for the company are environmental awareness and a need to generate green power, repowering which is replacement of old WTGs with new ones as the WTGs installed in the European markets are ageing with relatively low capacity and outdated technology, and offshore projects which is a new demand driver and several projects have commenced with Denmark accounting for a majority of them.
Objects if the Issue
The purpose of the issue is setting up and expansion of manufacturing facilities in for components at Daman, Bhuj, Hyderabad and Dhule, for tooling at Vadodara and a new storage facility at Daman as well as expansion of existing facilities to increase the storage capacity at Pondicherry.
Further the IPO looks to infuse capital in its subsidiaries for setting up manufacturing facilities in India, United States and China, marketing in the Denmark subsidiary and research and development in the subsidiaries in Germany and Netherlands.
Conclusion
The company is a leader in its own technology in the growing energy sector and to that extent a presence in portfolio is desirable. The price has been determined at Rs.425-510. The EPS is Rs.15 for the last fiscal and so the P/E multiple comes out to be 28.3 times at the lower end and 34 times at the higer end. It seems unlikely that even in this scenario where the company is a leader in its field it can manage a growth so fast to justify the high multiple that it demands. The IPO is high priced and considering the fact that the markets are also at dangerously high levels one is well advised to leave the IPO alone.
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the market is already in high position so the price of the share may reduce or increace
then being a leader why not they provide good roi and also why not they conquire the market
pl clarify me clearly whether to buy or when to buy
