Endurance Technologies is all set to float its initial public offer tomorrow. Below listed are 10 things investor should consider in Endurance Technology IPO:
1. First thing first- Endurance Technologies is India's largest aluminium die casting manufacturer and one of the country's leading automotive component manufacturers in aluminium die casting (including alloy wheels), suspension, transmission and brake systems segment.
2. The company supplies aluminium die castings to 2/3-wheeler manufacturer in India; in fact it is the largest supplier to 2-wheeler and 3-wheeler manufacturers in the country. It also caters to the 4-wheelers market in Europe.
3. Endurance Technologies operates 25 plants globally, with 18 of these manufacturing plants in India- all located in the major automotive manufacturing belts of the country. It also operates manufacturing units in Germany and Italy. The company is expected to commission two more machining plants- one in Germany, in FY2017, and another in Maharashtra, India, by the end of 2018.
Anurang Jain, MD, and Ramesh Gehaney, ED & COO, at a press conference in Mumbai
4. The current offer for sale is for 17.5 per cent of the company’s equity. Actis Private Equity is offering 13.7 per cent of the company’s stake, while its promoter and managing director Anurag Jain is offering 3.8 per cent share.
5. In terms of products, castings and alloys accounts for 46 per cent of the sales followed by suspensions at 33 per cent, transmission is 8 per cent, while brakes is 6 per cent and after- market sales contribute 7 per cent of the sales.
6. In terms of operating margins castings and alloys have the lowest operating profit margin of around 10 per cent, while others are in the range of 14-17 per cent. After-market sales are the highest margin segment earning around 18-20 per cent.
7. In last financial year, Endurance Technologies' India business accounted for 70 per cent of the company’s consolidated revenue. Italy contributed 23 per cent while Germany 7 per cent during the same period.
{googleAdsense}
8. Market share of Endurance Technologies in FY16 in dies segment was 22 per cent, brakes was 14 per cent, transmission segment was 14 per cent and suspension was 33 per cent.
9. Contribution of higher-margin products is rising steadily
10. Endurance Technologies is growing in tandem with Bajaj Auto, its main contributor to sales. FCA Italy accounting for 15 per cent is the company's second largest client, while Royal Enfield at 6 per cent is the third largest client.
The list of 'plus' suggests 'there is some room for upside on listing gains' for the ordinary investors. However, going by the company's fundamental, it seems to be one of those that can be kept for the long haul, observe analysts.
{alcircleadd}
Responses
