Capital goods IPOs in India offer investors opportunities to invest in companies producing machinery, equipment, and infrastructure essentials. These IPOs support industries like manufacturing and construction, aligning with India’s growth trajectory and infrastructure expansion, presenting potential for long-term returns in a growing economy.
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Overview of Capital Goods IPOs in India
Capital goods IPOs are vital for funding companies driving industrial and infrastructure growth. These firms manufacture critical equipment and tools for sectors like construction, energy, and transportation, directly contributing to India’s economic development and self-reliance initiatives under schemes like ‘Make in India.’
These IPOs attract investors due to their growth potential, aligning with the country’s focus on infrastructure expansion and manufacturing sector enhancement. As these companies support large-scale projects, they provide opportunities for robust returns, especially amid favorable government policies and rising industrialization.
IPO Fundamental Analysis
Ganesh Green Bharat Ltd
Ganesh Green Bharat Ltd has shown impressive growth, with a substantial rise in revenue, equity, and profitability in recent years. Despite some fluctuations in profitability metrics, the company’s financial position reflects strong expansion and operational progress.
Revenue Trend: Ganesh Green Bharat Ltd showed strong growth in sales, increasing from ₹106 Crores in FY22 to ₹85 Crores in FY23, and then rising significantly to ₹166 Crores in FY24. This surge highlights the company’s growth in market demand and operational expansion.
Equity and Liabilities: The company’s equity capital grew substantially to ₹25 Crores in FY24, compared to ₹1 Crore in FY22 and FY23, marking significant progress. Total liabilities increased to ₹219 Crores in FY24, up from ₹88 Crores in FY23, reflecting an expansion in operations.
Profitability: Ganesh Green Bharat Ltd maintained strong profitability, with its operating profit margin (OPM) slightly decreasing to 14% in FY24 from 16% in FY23, but still higher than the 9% achieved in FY22. This indicates solid cost management.
Earnings per Share (EPS): EPS saw a significant increase to ₹7.91 in FY24, compared to ₹67.83 in FY23 and ₹43.17 in FY22. This jump indicates strong profit generation despite the earlier fluctuations, signalling improved financial performance.
Return on Net Worth (RoNW): RoNW decreased slightly to 23.14% in FY24 from 32.89% in FY22 but remained higher than 19.16% in FY23. This reflects continued strong returns on equity, despite recent increases in liabilities.
Financial Position: Ganesh Green Bharat Ltd’s total assets increased to ₹219 Crores in FY24, matching the rise in total liabilities, suggesting a balanced financial structure. The company’s financial position indicates strong growth and increasing operational scale.
Divine Power Energy Ltd
Divine Power Energy Ltd has demonstrated significant growth in revenue and profitability, with strong performance in sales and improved financial metrics. Despite fluctuations in profitability, the company remains on a solid financial footing, driven by strategic expansion.
Revenue Trend: Divine Power Energy Ltd showed significant growth in sales, increasing from ₹122 Crores in FY22 to ₹151 Crores in FY23, and rising further to ₹222 Crores in FY24. This upward trend indicates a robust market demand and operational expansion.
Equity and Liabilities: Equity capital remained steady at ₹16 Crores in FY23 and FY24, reflecting stability. Total liabilities grew to ₹89 Crores in FY24, up from ₹73 Crores in FY23, indicating an increase in business activity and operational scale.
Profitability: The company’s operating profit margin (OPM) slightly decreased to 6% in FY24 from 7% in FY23, but was an improvement compared to 4% in FY22. This suggests steady cost control amidst increasing revenues.
Earnings per Share (EPS): EPS improved significantly to ₹4.06 in FY24, compared to ₹1.81 in FY23 and ₹63.03 in FY22. This strong recovery signals effective management and increased profitability, despite the earlier dip in FY22.
Return on Net Worth (RoNW): RoNW surged to 25.05% in FY24, up from 14.87% in FY23, indicating a healthy return on equity. This remarkable increase reflects improved financial performance and effective capital utilization in recent years.
Financial Position: Divine Power Energy Ltd’s total assets and liabilities both increased to ₹89 Crores in FY24, reflecting growth in operational scale. The steady equity base and expanding assets show a balanced financial position supporting the company’s expansion.
Shivalic Power Control Ltd
Shivalic Power Control Ltd has demonstrated consistent growth in sales, equity, and profitability. With improved operating margins and robust financial management, the company is poised for continued expansion despite fluctuations in earnings per share and return on equity.
Revenue Trend: Shivalic Power Control Ltd has shown strong growth in sales, rising from ₹57 Crores in FY22 to ₹82 Crores in FY23, and further to ₹102 Crores in FY24. This consistent revenue growth highlights strong demand and operational efficiency.
Equity and Liabilities: The company’s equity capital grew significantly to ₹18 Crores in FY24, up from ₹1 Crore in FY23 and FY22. Total liabilities increased to ₹91 Crores in FY24 from ₹58 Crores in FY23, reflecting the company’s expanding operations and capital needs.
Profitability: Shivalic Power’s operating profit margin (OPM) improved to 19% in FY24, up from 16% in FY23 and 9% in FY22, reflecting efficient cost management and increased operational scale in the growing market.
Earnings per Share (EPS): EPS showed a sharp decline, standing at ₹6.34 in FY24 compared to ₹71.23 in FY23 and ₹17.41 in FY22. Despite the drop, the company’s profitability remains strong, reflecting efficient management.
Return on Net Worth (RoNW): RoNW decreased to 28.22% in FY24, down from 31.09% in FY23, yet still indicates a healthy return on equity. This solid RoNW reflects the company’s ability to generate returns for shareholders despite slight fluctuations.
Financial Position: Shivalic Power Control Ltd’s total assets rose to ₹91 Crores in FY24 from ₹58 Crores in FY23, reflecting a healthy growth trajectory. The company’s total liabilities also increased, but overall assets and equity show strong financial stability.
IPO Financial Analysis
Ganesh Green Bharat Ltd
| Mar 2024 | Mar 2023 | Mar 2022 | |
| Sales | 166 | 85 | 106 |
| Expenses | 142 | 71 | 97 |
| Operating Profit | 24 | 14 | 9 |
| OPM % | 14% | 16% | 9% |
| Other Income | 1 | 0 | 1 |
| Interest | 4 | 3 | 2 |
| Depreciation | 1 | 1 | 1 |
| Profit before tax | 20 | 11 | 7 |
| Tax % | 27% | 26% | 26% |
| Net Profit | 14 | 8 | 5 |
| EPS in Rs | 7.91 | 67.83 | 43.17 |
| Dividend Payout % | 0% | 0% | 0% |
Figures in Rs. Crores
Divine Power Energy Ltd
| Mar 2024 | Mar 2023 | Mar 2022 | |
| Sales | 222 | 151 | 122 |
| Expenses | 208 | 140 | 117 |
| Operating Profit | 14 | 10 | 5 |
| OPM % | 6% | 7% | 4% |
| Other Income | 1 | 0 | 0 |
| Interest | 5 | 5 | 4 |
| Depreciation | 1 | 1 | 1 |
| Profit before tax | 8 | 5 | 1 |
| Tax % | 21% | 39% | 27% |
| Net Profit | 6 | 3 | 1 |
| EPS in Rs | 4.06 | 1.81 | 63.03 |
| Dividend Payout % | 0% | 0% | 0% |
Figures in Rs. Crores
Shivalic Power Control Ltd
| Mar 2024 | Mar 2023 | Mar 2022 | |
| Sales | 102 | 82 | 57 |
| Expenses | 83 | 69 | 52 |
| Operating Profit | 19 | 13 | 5 |
| OPM % | 19% | 16% | 9% |
| Other Income | 0 | 1 | 0 |
| Interest | 3 | 2 | 2 |
| Depreciation | 2 | 1 | 1 |
| Profit before tax | 15 | 10 | 2 |
| Tax % | 26% | 25% | 8% |
| Net Profit | 11 | 7 | 2 |
| EPS in Rs | 6.34 | 71.23 | 17.41 |
| Dividend Payout % | 0% | 0% | 0% |
Figures in Rs. Crores
About the Company
Ganesh Green Bharat Ltd
Ganesh Green Bharat Ltd has experienced rapid growth, with a significant rise in revenue from ₹122 Crores in FY22 to ₹222 Crores in FY24. The company’s increasing market demand and operational scale highlight its strong market position and future potential.
With a steady equity capital of ₹25 Crores in FY24, the company has been able to manage its expansion effectively. Despite the increase in liabilities to ₹219 Crores, Ganesh Green Bharat maintains a healthy return on equity of 23.14%, reflecting effective capital utilization.
Divine Power Energy Ltd
Divine Power Energy Ltd has shown substantial revenue growth, from ₹122 Crores in FY22 to ₹222 Crores in FY24. The company’s upward trajectory in sales demonstrates its increasing market penetration and growing demand for its products in the energy sector.
With equity capital remaining stable at ₹16 Crores, the company has effectively managed its liabilities, which grew to ₹89 Crores in FY24. Its return on equity, increasing to 25.05%, demonstrates solid profitability and efficient capital deployment, supporting its ongoing expansion strategy.
Shivalic Power Control Ltd
Shivalic Power Control Ltd has exhibited robust growth in sales, rising from ₹57 Crores in FY22 to ₹102 Crores in FY24. The company’s consistent performance across the years reflects strong demand and effective operational management.
Despite fluctuations in earnings per share, Shivalic Power maintains a solid financial position, with assets rising to ₹91 Crores in FY24. The company’s operating profit margin has improved to 19%, underlining its ability to efficiently manage costs and generate higher profitability in a competitive market.
Advantages of Investing in Capital Goods Sector IPOs
The main advantages of investing in Capital Goods sector IPOs include exposure to infrastructure growth, government support, long-term demand, and diversification opportunities. These factors position the sector as a valuable addition to a well-rounded investment portfolio.
- Infrastructure Growth: Capital Goods companies benefit from rising demand due to infrastructure projects in transportation, power, and urbanization, ensuring consistent growth opportunities.
- Government Initiatives: Policies like Make in India and increased capital expenditure in budgets create a favourable environment for the Capital Goods sector.
- Long-Term Demand: Industrialization and technological advancements drive sustained demand for machinery, equipment, and construction materials, ensuring long-term growth potential.
- Portfolio Diversification: Investing in Capital Goods IPOs allows diversification into industrial and manufacturing sectors, reducing portfolio dependency on technology and financial services.
Disadvantages of Investing in Capital Goods Sector IPOs
The main disadvantages of investing in Capital Goods sector IPOs include cyclical risks, high capital intensity, dependency on government policies, and global market exposure. Investors need to consider these risks when evaluating opportunities in the sector.
- Cyclical Nature: The sector is highly cyclical and sensitive to economic downturns, which can lead to reduced demand and profitability during recessions.
- High Capital Intensity: Capital Goods companies require significant investment in machinery and technology, which can strain financial resources and impact profitability.
- Dependency on Policies: Growth often depends on government infrastructure spending, which can fluctuate due to policy changes or budget constraints.
- Global Market Exposure: Many companies rely on exports, making them vulnerable to global economic conditions, trade wars, and currency fluctuations.
Role of the Capital Goods Industry in the Economy
The Capital Goods industry is a cornerstone of economic development, providing the machinery and equipment essential for infrastructure projects, industrial growth, and manufacturing activities. It supports sectors like power, construction, and transportation, driving job creation and technological innovation.
Moreover, the industry enhances India’s global competitiveness by supporting exports of high-quality equipment and machinery. It also fosters industrial self-reliance, reducing dependency on imports and contributing significantly to GDP growth.
How to Invest in Capital Goods IPOs?
To invest in Capital Goods IPOs, open a demat account, stay updated on IPO listings, research thoroughly, and apply via ASBA through your bank or broker like Alice Blue.
- Research the Sector: Analyze the company’s role in the Capital Goods sector, financial health, and growth potential.
- Study IPO Prospectus: Review the prospectus for insights into valuation, risk factors, and use of proceeds.
- Open Demat Account: Open a Demat account with a broker like Alice Blue to apply for IPOs seamlessly.
- Apply Through ASBA/UPI: Use the ASBA facility or UPI via a trading platform to submit your IPO application.
- Monitor Allotment Status: Check the allotment status and plan your strategy based on the stock’s post-listing performance.
Future Outlook of Capital Goods IPOs in India
The future of Capital Goods IPOs in India is promising, driven by rising infrastructure investments, industrialization, and government initiatives like Make in India. These factors create opportunities for companies to expand operations and meet growing demand.
As India focuses on renewable energy, smart cities, and advanced manufacturing, the Capital Goods sector is expected to grow significantly. Investors can benefit from well-positioned IPOs, provided they conduct thorough due diligence on market trends and company fundamentals.
Capital Goods IPOs in India – FAQ
A Capital Goods IPO refers to an initial public offering by companies in industries that manufacture machinery, equipment, and infrastructure products. These IPOs provide investors with an opportunity to invest in companies driving economic growth.
Some major Capital Goods companies in India that have launched IPOs include L&T Technology Services, Bharat Electronics, and Aster DM Healthcare, contributing to the growth of India’s infrastructure and industrial sectors.
Capital Goods IPOs play a vital role in the Indian stock market by attracting long-term investments, fostering infrastructure development, and contributing to the country’s industrial growth. These IPOs reflect economic expansion and business confidence.
The largest Capital Goods IPO in India was L&T Technology Services in 2016, with an offer size of ₹1,500 crore. It marked a major milestone in India’s infrastructure and technology sectors.
To invest in Capital Goods IPOs, you need to open a demat and trading account with Alice Blue, review the IPO prospectus, apply through a broker or online platform, and place bids before the IPO closing date.
Capital Goods IPOs can be suitable for long-term investment as they typically represent companies involved in infrastructure development and industrial growth, which are essential for economic progress and can provide consistent returns.
Capital Goods IPOs can be profitable for investors, particularly when companies are well-positioned in high-demand sectors like construction, energy, and manufacturing. However, profitability depends on market conditions and company performance post-IPO.
Yes, upcoming Capital Goods IPOs in India can be found through financial news platforms and broker websites. Companies in sectors like manufacturing, construction, and renewable energy often file IPOs to raise funds for expansion.
You can find detailed reviews and analyses of Capital Goods IPOs on financial websites, stock market platforms like Moneycontrol, and Economic Times, or directly from brokerage firms like Alice Blue.
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Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.
