• Price Band of ₹ 102 – ₹ 108 per equity share bearing face value of ₹2 each (“Equity Shares”)
• Bid/Offer Opening Date – Tuesday, August 22, 2023 and Bid/Offer Closing Date – Thursday, August 24, 2023.
• Minimum Bid Lot is 130 Equity Shares and in multiples of 130 Equity Shares thereafter.
• The Floor Price is 51 times the face value of the Equity Share and the Cap Price is 54 times the face value of the Equity Share.
Risks to Investors
1. Our Company requires significant amounts of working capital and significant portion of our working capital is consumed in trade receivables and inventories. Our inability to meet our working capital requirements including failure to realise receivables and inventories may have an adverse effect on our results of operations and overall business.
2. We derive revenue from sale of number of products viz. sale of stainless steel corrugated flexible hoses (with and without braiding), stainless steel braiding, stainless steel interlock hoses, assemblies, and others and significant revenue from stainless steel corrugated flexible hoses (with and without braiding). Any decrease in the sales of our key products will adversely affect our business. Our inability to successfully further diversify our products may adversely affect our growth and negatively impact our profitability.
3. We export our products to various countries and the export operations of our Company contribute more than 80% of Revenue from Operations, out of which export to USA constitutes 28% and 32% of the revenue from operations for the Fiscals March 31, 2023 and March 31, 2022. On account of the aforesaid, we may be subject to significant import duties or restrictions of the relevant jurisdictions. Our inability to comply with related requirements may have an adverse effect on our business and results of operations.
4. We derive portion of our revenues certain key customers located in India and globally to whom we sell our product offering.
(amount in ₹ million)
Revenue by customers March 31, 2023 March 31, 2022 March 31, 2021
Amount % of revenue from operations Amount % of revenue from operations Amount % of revenue from operations
Top 5 649.50 24.10 795.11 33.02 466.08 32.19
*The top 5 customers are in terms of revenue for each of the respective years and may not necessarily be the same customers.
5. The industry segments in which we operate being fragmented and diversified, we face competition from other large and small global and domestic players, which may affect our business operations and financial conditions.
6. Our funding requirements and proposed deployment of the Net Proceeds are based on management estimates and we have not entered into any definitive arrangements to utilize certain portions of the Net Proceeds of the Issue and have not been independently appraised by a bank or a financial institution. Any variation in the utilisation of the Net Proceeds would be subject to certain compliance requirements, including prior shareholders' approval
7. Average Cost of Acquisition of Equity Shares for our Promoter Selling Shareholder.
The average cost of acquisition of Shares for the Promoter Selling Shareholder is as follows:
Name No. of shares held Average Cost Acquisition (in ₹ per Equity Share) * Offer price at higher end (in ₹)
Sat Industries Limited 96,681,833 1.95 108
*As certified by M/s Shweta Jain & Co., Chartered Accountants the statutory auditors of our Company pursuant to their certificate dated August 11, 2023.
9. Weighted average cost of acquisition, floor price and cap price
Types of transactions Weighted average cost of acquisition (₹ per Equity Shares) Floor Price (in ₹ 102) Cap Price (in ₹ 108)
WACA for secondary transactions during 3 years of RHP 87.56 1.16 1.23
*As certified by M/s Shweta Jain & Co., Chartered Accountants the statutory auditors of our Company pursuant to their certificate dated August 11, 2023. Note-we have considered secondary sales by our promoter. Details for secondary transaction is disclosed on page 119 of the RHP
10. Our Company will not receive any proceeds from the Offer for Sale portion of the Offer and the same will be received by the Promoter Selling Shareholder.
11. The BRLM associated with the Offer have handled 5 public issues in the past three Fiscal Years, none of issues closed below the Offer price on the listing date.
12. The Offer Price, price to earnings ratio market capitalization to total income ratio, market capitalization to earnings multiple, and Weighted Average return on net worth, may not be indicative of the market price of the Equity Shares on listing, for the years indicated.
a. Price to Earnings (P/E) ratio on Based on basic and diluted EPS for fiscal 2023 for our company at upper end of the price band is 40.91 times. b. Weighted Average return on net worth for fiscals 2023, 2022 and 2021 is 25.56%.
c. Our market capitalization at lower end and higher end of price band to total income for fiscal 2023 is 4.89 times and 5.18 times respectively
Mumbai, August 16, 2023: Mumbai-based Aeroflex Industries Ltd, is a manufacturer of environment friendly Metallic Flexible Flow Solution products, catering to global markets has fixed the price band at ₹ 102 to ₹ 108 per Equity Share for its maiden public offer. The initial public offering (“IPO” or “Offer”) of the Company will open on Tuesday, August 22, 2023, for subscription and closes on Thursday, August 24, 2023. Investors can bid for a minimum of 130 Equity Shares and in multiples of 130 Equity Shares thereafter.
The Public Issue of face value of ₹2 per Equity Share comprises of fresh issuance of equity shares worth Rs 162 crore and an Offer for Sale (OFS) up to 17.5 million equity shares.
The Company through its IPO will fetch Rs 340.5 crore - Rs 351 crore at the lower and upper end of the price band.
Promoters of the company, in consultation with the lead bankers to the issue, sold 8.69 million equity shares or 7.6% stake and raised Rs 76.14 crore in a Pre-IPO placement from institutional investors, including Ashish Kacholia, Bengal Finance and Investment Private Limited, Mitul Prafulbhai Mehta, Samedh Trinity Partners, Jagdish Master, Shyamsundar Basudev Agarwal, VPK Global Ventures Fund, Rajnikkumar Sureshbhai Savaliya HUF, Rosy Blue (India) Private Limited, Carnelian Structural Shift Fund.
Aeroflex exports its products to more than 80 countries including Europe, USA and others, generating more than 80% of its revenue from exports. Aeroflex’s solutions find applications in a wide spectrum of industries for controlled flow of all forms of substances including air, liquid and solid. The Company’s manufacturing facility and NABL accredited R&D lab are situated at Taloja, Navi Mumbai.
For Fiscal 2023, Aeroflex generated consolidated revenue from operations of Rs. 269.4 crores. The Company had EBITDA of Rs. 54 crores and EBITDA margin of 20.05%. The Company’s profit after tax for Fiscal 2023 was Rs. 30.1 crores with PAT margin of 11.19%. The Company’s Return on Equity (RoE) and Return on Capital Employed (RoCE) was 26.43% and 31.91% for Fiscal 2023.
Flexible flow solutions play a critical role in transfer of substances (air, liquid and solid) in any industrial or commercial ecosystem, connecting the origin and end points of various processes. The Company offers its products under more than 1,700 SKUs (Stock Keeping Units). The Company has recently developed products made of bronze as well and has a pipeline of more than 55 products as on date. Given the complexity of the research and product development, varying product applications, necessary technical expertise, precision involved, lengthy and stringent customer qualification processes, Aeroflex’s business model poses significant entry barriers (to new entrants) as well as exit barriers (to existing customers).
Pantomath Capital Advisors Private Limited is the sole book running lead manager and Link Intime India Private Limited is the Registrar to the Offer. The Equity Shares are proposed to be listed on BSE and NSE.
DISCLAIMERS: AEROFLEX INDUSTRIES LIMITED is proposing, subject to applicable statutory and regulatory requirements, receipt of requisite approvals, market conditions and other considerations, to undertake an initial public offer of its Equity Shares and has filed the RHP with RoC on August 11, 2023. The RHP shall be available on the website of SEBI at www.sebi.gov.in, websites of the Stock Exchanges i.e., BSE at www.bseindia.com and NSE at www.nseindia.com and is available on the websites of the BRLM, i.e. Pantomath Capital Advisors Private Limited at www.pantomathgroup.com. Any potential investors should note that investment in equity shares involves a high degree of risk and for details relating to such risk, please see the section titled “Risk Factors” on page 37 of the RHP. Potential investors should not rely on the RHP filed with SEBI for making any investment decision..The Equity Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any other applicable law of the United States and, unless so registered, may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration; requirements of the U.S. Securities Act and applicable state securities laws. Accordingly, the Equity Shares are being offered and sold (a) only to persons reasonably believed to be (i) "qualified institutional buyers" (as defined in Rule 144A under the U.S. Securities Act and referred to as 'U.S. QIBs') in transactions exempt from the registration requirements of the U.S. Securities Act, and (ii) Qualified Purchasers, as defined in Section 2(a)(51) of the U.S. investment Company Act of 1940, and (b) outside the United States in offshore transactions in compliance with Regulation S and the applicable laws of the jurisdiction where those offers and sales are made. There will be no public offering of the Equity Shares in the United Slates.
DISCLAIMER CLAUSE OF SEBI: SEBI only gives its observations on the offer documents and this does not constitute approval of either the Offer or the specified securities stated in the Offer Document. The investors are advised to refer to pages 281 of the RHP for the full text of the disclaimer clause of SEBI.
DISCLAIMER CLAUSE OF BSE (The Designated Stock Exchange): It is to be distinctly understood that the permission given by BSE Limited should not in any way be deemed or construed that the RHP has been cleared or approved by BSE nor does it certify the correctness or completeness of any of the contents of the RHP. The investors are advised to refer to the pages 283 of the RHP for the full text of the disclaimer clause of BSE
DISCLAIMER CLAUSE OF NSE: It is to be distinctly understood that the permission given by National Stock Exchange of India Limited should not in any way be deemed or construed that the Offer Document has been cleared or approved by National Stock Exchange of India Limited nor does it certify the correctness or completeness of any of the contents of the Offer Document. The investors are advised to refer to page 284 of the RHP for the full text of the disclaimer clause of National Stock Exchange of India Limited.
For further details in relation to the Company, BRLM, Company Secretary and Compliance Officer of the Company, availability of application forms and RHP, please refer to statutory advertisement published on August 15, 2023.