Akanksha Power and Infrastructure IPO Financial Analysis

Akanksha Power and Infrastructure provides efficient and cost-effective power solutions through APFC panels, AMI infrastructure featuring smart meters, and power quality measurement products is set to launch its IPO on December 27, 2023. Here's a summary of the company's business model, strengths, weaknesses, and growth prospects to assist investors in making informed decisions.

Akanksha Power and Infrastructure IPO Overview

Established in 2008, Akanksha Power and Infrastructure Ltd focuses on sustainable power solutions. The company produces electrical panels, instrument transformers, and vacuum contactors for power transmission and distribution utilities. Recently, it has expanded into turnkey construction for High Tension (HT) and Low Tension (LT) electrical infrastructure, including substations. Operating in harsh conditions, its Vacuum Contactors are known for reliable performance. With manufacturing units in Nashik, Maharashtra, the company serves both traditional thermal power and the growing renewable power segments.

Akanksha Power and Infrastructure IPO Strengths

1. Maintains a commendable track record, showcasing consistent success over time.

2. The company benefits from government support directed towards both the power sector and the electric equipment industry, providing a conducive operating environment.

3. Collaboration with major industry players in technical partnerships.

4. They're using more advanced and energy-efficient technologies.

Akanksha Power and Infrastructure IPO Risk

1. Dealing with working capital requirements poses a challenge for the company.

2. The company heavily depends on its suppliers, adding to its operational challenges.

3. The business is under government control, impacting aspects like pricing, which introduces uncertainties.

4. The industry faces high levels of competition, creating a competitive landscape that demands strategic positioning.

5. Changes in government policies can have an impact on the company's operations, adding a layer of uncertainty.

6. The company has been facing negative cash flows in its operations, investments, and financing for several years. This persistent trend may impact its growth negatively.

Akanksha Power and Infrastructure IPO Details

Akanksha Power and Infrastructure IPO is scheduled from 27 to 29 December 2023. It has a face value of ₹10 per share, and the IPO's price range is ₹52-55 per share.

Financial Performance of Akanksha Power and Infrastructure IPO

Akanksha Power and Infrastructure experienced a positive free cash flow of Rs 48.8 million in FY21. However, in FY22, there was a downturn with a negative free cash flow of Rs -52.4 million. The negative trend continued in FY23, recording a free cash flow of Rs -29.9 million. These figures reflect fluctuations in the company's available cash during these years, indicating potential financial challenges or shifts in its financial situation.

Key Ratios

In the fiscal year 2023, Akanksha Power and Infrastructure reported a profit after tax (PAT) margin of 6.27%. Comparatively, in FY22, the PAT margin was slightly lower at 4.63%, in FY21, it stood at 5.27%. Assessing the return on equity (ROE), FY23 recorded an ROE of 18.23%, showing a slight decrease from FY22, where the ROE was 18.47%. Notably, the return on equity was higher in FY21, reaching 36.81%. These metrics provide insights into the company's profitability and return on shareholder equity over the specified fiscal years.

Akanksha Power and Infrastructure Vs Peers

Akanksha Power and Infrastructure has a P/E ratio of 24.02, HPL Electric & Power is at 18.7, and Genus Power Infrastructure has a higher ratio of 67.22, Cospower Engineering stands out with a notably high P/E ratio of 216.65.

Promoters of Akanksha Power and Infrastructure

1. Mr Bipin Bihari Das Mohapatra.
2. Ms Chaitali Bipin Dasmohapatra.

Before going public, the founder owned 83.28% of the company. However, after the Initial Public Offering (IPO), their ownership stake will decrease to 60.81% due to the issuance of new shares. This shift in ownership structure reflects the changes.

Final Words

This article takes a closer look into Akanksha Power and Infrastructure IPO, scheduled for subscription from December 27, 2023. It suggests that potential investors thoroughly review the company's details, financials, subscription status, and the Grey Market Premium (GMP). The GMP indicates the anticipated listing performance, providing valuable insights for investors to make well-informed decisions.