KP Green Engineering files draft papers for SME IPO – EQ

In Short : KP Green Engineering has filed draft papers for a Small and Medium-sized Enterprises (SME) Initial Public Offering (IPO). This move represents the company’s intention to raise capital and go public, signaling potential growth and expansion plans for the engineering firm.

In Detail : KP Green Engineering Limited, part of the Gujarat-based KP Group, manufactures fabricated and hot-dip galvanized steel products has filed its draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).

The IPO, with a face value of Rs 5 per equity share, is entirely a fresh issue of up to 13.16 million shares with no offer of sale component.

KP Green Engineering is the third offering from the KP Group after KP Energy Ltd came out in 2016 to raise Rs 6.44 crs at a price of Rs 70 per share and today trades at Rs 973.40 per equity share and erstwhile KPI Global Infrastructure Ltd now KPI Green Energy Ltd that came out for an IPO in 2019 to raise Rs 39.94 crs at a price of Rs 80 per share and trades at Rs 1655.55 per equity share

The issue is being made through the book-building process, wherein not more than 50% of the net issue shall be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15% of the net issue shall be available for allocation to non-institutional investors, and not less than 35% of the net issue shall be available for allocation to retail individual investors.

The proceeds from its fresh issuance worth Rs 156.14 crore will be utilized to partially finance the capital expenditure towards setting up a new manufacturing unit to expand its current production capabilities, expand the current product portfolio, and for general corporate purposes.

KP Green Engineering, established by Dr. Farukbhai Gulambhai Patel, has over 15 years of expertise in the renewable energy sector. Since its inception in 1994, KP Group has achieved over 25 years of prosperous operations, comprising more than 30 entities throughout India, each contributing significantly to the organization’s growth.

Founded in 2001, KP Green Engineering specializes in manufacturing fabricated and hot-dip galvanized steel items. Its extensive product range encompasses lattice tower structures, substation structures, solar module mounting structures, cable trays, earthing strips, beam crash barriers, and other infrastructure solutions.

With in-house fabrication and hot dip galvanizing facilities, the company offers engineering, designing, fabrication, galvanization, and deployment processes seamlessly. Additionally, it offers Fault Rectification Services (FRT) for optical fiber cables, galvanizing job work, and solar installation services.

Recognized vendors for GETCO (Gujarat Energy Transmission Corporation Limited) and MSETCL (Maharashtra State Electricity Transmission Company), the company, ISO 9001:2015 certified caters to requirements up to 400 Kw and 220 Kw, respectively. It operates a manufacturing facility in Dabhasa, Vadodara, Gujarat, spread across 200,000 sq. ft., equipped with CNC machinery and other equipments.

It plans to expand its current operations and product line at its upcoming manufacturing plant in Matar, Bharuch. The new facility, with a capacity exceeding 2,90,000 MT, marks a significant increase from its current 53,000 MT capacity. Alongside its existing offerings, the company intends to introduce new products like high masts, floor gratings, pre-engineered buildings, and heavy fabrications to address evolving market demands.

KP Green Engineering clocked a profit of Rs 12.40 crore in the financial year FY23, up from Rs 4.54 crore in the previous year. Revenue during the year FY23 increased significantly to Rs 114.21 crore from Rs 77.70 crore in the previous year, an increase of 46.98%, primarily due to an increase in revenue from the sale of products and services.

For the nine months ended December 31, 2023, revenue from operations stood at Rs 103.93 crore, and profit after tax stood at Rs 11.27 crore.

Beeline Capital Advisors Private Limited is the sole lead manager, and Bigshare Services Private Limited is the registrar of the issue.