Kay Cee Energy & Infra IPO Financial Analysis

Kay Cee Energy & Infra is an EPC firm, specializing in constructing power transmission and distribution systems, such as overhead and underground lines, substations, and automation. Its clients range from government authorities to private entities is set to launch its IPO on December 28, 2023. Here's a summary of the company's business model, strengths, weaknesses, and growth prospects to assist investors in making informed decisions.

Kay Cee Energy & Infra IPO Overview

Kay Cee Energy & Infra Ltd, established in 2015, specializes in constructing and commissioning electricity transmission and distribution systems, focusing on the Indian power sector. The company engages in engineering, procurement, and construction (EPC) projects, serving government entities, including Rajasthan Rajya Vidyut Prasaran Nigam Ltd. Their broad portfolio covers handling, erection, testing, and commissioning of equipment for power systems, involving transmission lines, substation construction, automation, and extending existing power systems.

Kay Cee Energy & Infra PO Strengths

1. The company holds a robust order book, totaling around ₹5,499 crore, for supplying, erecting, and commissioning Extra High Voltage (EHV) transmission lines and substations. Currently, they are actively engaged in 15 projects.

2. Kay Cee Energy & Infra consistently collaborates with public sector units and state governments to meet stringent quality and safety standards.

3. Led by a skilled management team, with a promoter boasting a track record since 1996, the company handles power projects using industry expertise, strategic vision, and a commitment to client satisfaction.

4. Steady financial results.

Kay Cee Energy & Infra PO Risk

1. Relies heavily on its top five customers, who contribute most of its revenue. If it loses business from one or more of them, it could impact both revenue and profitability.

2. Revenue heavily relies on winning bids with the government and other agencies. If a significant number of these bids are not accepted or awarded, it could impact the company's performance.

3. A large portion of the company's earnings is tied to projects in Rajasthan. Any issues there, such as shifts in government policies, could have a substantial impact on the business.

4. Common challenges in projects, such as equipment breakdowns or legal issues, can negatively affect the company's success. These problems may impact both its finances and day-to-day operations.

Kay Cee Energy & Infra IPO Details

Kay Cee Energy & Infra IPO is scheduled from 28 December 2023 to 02 January 2024. It has a face value of ₹10 per share, and the IPO's price range is ₹51-54 per share.
 

Financial Performance of Kay Cee Energy & Infra IPO

Kay Cee Energy & Infra recorded a negative free cash flow of ₹-136.9 million in FY21. However, in FY22, there was little improvement with a negative free cash flow of ₹-47.5 million. The negative trend continued in FY23, recording a free cash flow of ₹-139.1 million. These figures reflect fluctuations in the company's available cash during these years.

Key Ratios

In FY23, Kay Cee Energy & Infra saw a PAT margin of 8.99%, marking an improvement from FY22 (6.18%) and FY21 (5.28%). The Return on Equity (ROE) rose to 25.15% in FY23, up from 18.89% in FY22 but lower than FY21's 14.12%. These metrics track the company's growing profitability and shareholder equity returns over the specified fiscal years.

Kay Cee Energy & Infra IPO Vs Peers

Among its peers, Kay Cee Energy & Infra has the lowest P/E ratio at 7.59, while Viviana Power Tech Limited has a P/E ratio of 24.17, and Kec International Limited has a higher P/E ratio of 96.93.

Promoters of Kay Cee Energy & Infra

1. Mr. Lokendra Jain
2. Mrs. Shalini Jain

Lokendra Jain and Shalini Jain are the promoters of the company, currently holding 96.12%. However, with the issuance of new shares in the IPO, the promoter equity holding is expected to dilute to 70.25%.

Final Words

This article explores the Kay Cee Energy & Infra IPO, available for subscription starting December 28, 2023. It recommends potential investors thoroughly check the company's details, financials, subscription status, and Grey Market Premium (GMP). GMP gives insights into the expected listing performance, helping investors make informed decisions.