CRISIL has assigned a CRISIL IPO grade of '3/5' to the proposed IPO of Advanced Enzyme Technologies (AETL). This grade indicates that the fundamentals of the IPO are 'average' relative to the other listed equity securities in India. However, this grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The grade is not a recommendation to buy, sell or hold the graded instrument, its future market price or suitability for a particular investor.
The grade is driven by AETL's position as the largest domestic manufacturer and exporter of enzymes in India. The company has 30 percent share of the domestic enzyme market, second after Denmark-based Novozymes A/S (which operates in India through its South Asian subsidiary). AETL has developed a portfolio comprising over 400 enzyme products developed from 55 proprietary enzymes. With an aggregate fermentation capacity of 360m3, the company is one of the largest producers of industrial enzymes in South-East Asia. It also has a strong R&D focus with three development labs in India and one in California, US. AETL is one of the few enzyme companies in the country which are present across the industry value chain including R&D, manufacturing, marketing and distribution of enzyme products. This integrated approach provides AETL better control over quality and enables it to price its products more competitively. Since India is not a large market for enzyme products at present, the company is strategically focusing on exports (59 percent of total sales in FY13). It intends to expand its foothold further in the lucrative international markets, particularly the US and Europe. Domestic and global enzyme markets are both estimated to grow strongly at CAGR of 12 percent and 6.9 percent, respectively, over 2010-2020, driven by demand for food and beverage and clinical diagnostic enzymes.
The grade is constrained by project-related risks associated with the expansion of AETL's existing manufacturing plants and R&D facilities; and execution risks related to its acquisition plans in the global markets. The extent to which these proposed investments can be monetised is uncertain. Currently the company has a niche positioning in the international markets and offers customised solutions. However, in our opinion, to expand further in these markets the company has to start providing standardised products and compete directly with market leaders such as Novozymes.
AETL's consolidated operating income grew at 26.8 percent CAGR over FY09-13 to Rs 2.2 bn, driven primarily by growth in exports. Over the same period, standalone sales grew at 14.9 percent CAGR. Discontinuation of non-core operations and better realisations from exports boosted EBITDA margin to 41.5 percent in FY13, up from 20.7 percent in FY09. Average RoE over FY09-13 was a strong 31.9 percent, mainly due to better margins and improved fixed asset turnover.
AETL, founded in 1989, manufactures and markets value-added enzyme products for various industrial usage. It is the largest manufacturer and exporter of enzymes in India, and second in terms of market share after Denmark-based Novozymes. The company has a total fermentation capacity of 360m3 in its two fermentation and formulation facilities based in Indore and Nashik. It is also present in overseas markets, particularly the US, through its group companies. AETL is promoted by Mr Vasant Laxminarayan Rathi and Mr Chandrakant Laxminarayan Rathi. Kotak Private Equity Group has a minority stake (4.75 percent) in the company. In FY13, the company reported a turnover of Rs.2.2 bn, net profit of Rs.508.8 mn and RoE of 38.6 percent.
AETL is planning to raise Rs.2.0 bn from the fresh issue. The company intends to use the issue proceeds to expand the fermentation capacity of the manufacturing plant in Indore to 240m3, to establish a research and development centre at Nashik, to combine and upgrade the two existing R&D plants in Thane in a single facility, to invest in its US-based subsidiary, and for acquisition and other strategic initiatives in international markets.
Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report. The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.
CRISIL Limited. All Rights Reserved. Published under permission from CRISIL"
Anda sedang membaca artikel tentang
CRISIL assigns grade 3/5 to Advanced Enzyme IPO
Dengan url
http://harmonisem.blogspot.com/2013/09/crisil-assigns-grade-35-to-advanced.html?m=0
Anda boleh menyebar luaskannya atau mengcopy paste-nya
CRISIL assigns grade 3/5 to Advanced Enzyme IPO
namun jangan lupa untuk meletakkan link
CRISIL assigns grade 3/5 to Advanced Enzyme IPO
sebagai sumbernya
0 komentar:
Posting Komentar