Corrtech International IPO: Corrtech International is a leading provider of pipeline laying solutions in India, specializing in hydrocarbon pipelines. They also manufacture precision components for gas and steam turbines, and serve the aerospace and defense sectors. The company operates in a crucial industry for India’s energy infrastructure and economic growth.
Corrtech International IPO Key Details:
- Status: Corrtech International’s IPO has not yet launched.
- Issue Size: The planned IPO will consist of:
- Fresh issue: Rs. 350 crore worth of new equity shares.
- Offer for Sale: 40 lakh shares from existing shareholders.
- Price Band: The price band for the issue is yet to be finalized.
News & Developments:
- Corrtech International received SEBI approval for the IPO in July 2022, but no further updates have been announced since then.
- Recent developments in the oil and gas sector, including rising energy prices, could potentially boost investor interest in the company.
- Given the company’s established position in a critical industry and the potential benefits of rising energy prices, Corrtech International IPO could attract investor interest. However, the lack of updates on the issue timeline and uncertainties in the broader market may dampen enthusiasm.
Corrtech International IPO Offer Details:
Securities Offered:
Corrtech International IPO will offer equity shares only. These are units of ownership in the company, and investors who subscribe to the IPO will become shareholders.
Investor Category Reservation:
As the IPO details haven’t been finalized, the specific reservation percentages for different investor categories are still unknown. However, based on typical Indian IPOs, the reservation could be something like:
- Retail Investors: 35%
- Qualified Institutional Buyers (QIBs): 50%
- Non-Institutional Investors: 15%
Minimum Lot Size:
The minimum lot size for the IPO will likely be one bid lot. This typically represents a specific number of shares, for example, 100 shares. The final minimum lot size will be confirmed closer to the issue date.
Investment Amount:
The amount required to invest will depend on the minimum lot size and the final issue price. Once the price band is announced, you can multiply the minimum lot size by the lower and upper price band to estimate the minimum and maximum investment amounts.
Example:
If the minimum lot size is 100 shares and the price band is Rs. 20-25 per share, the minimum investment amount would be Rs. 2,000 (100 shares * Rs. 20), and the maximum investment amount would be Rs. 2,500 (100 shares * Rs. 25).
For more details refer Corrtech International Limited, Draft Offer Documents filed with SEBI.
Corrtech International Company profile:
History & Operations:
- Founded in 1982: Corrtech has 41 years of experience in India’s crucial pipeline construction sector.
- Core Businesses:
- Pipeline Construction: Lays oil and gas pipelines with expertise in cross-country and directional drilling techniques.
- Cathodic Protection Solutions: Protects pipelines from corrosion, ensuring their longevity and safety.
- Precision Components: Manufactures high-quality parts for gas and steam turbines, catering to aerospace and defense sectors through subsidiary Corrtech Energy Limited (CEL).
- Market Position & Share: A leading player in India’s pipeline laying segment, with a significant market share. Exact figures vary depending on project type and region.
Key Facts:
- Headquarters: Ahmedabad, Gujarat, India
- Employees: Over 1,000
- Revenue: Over INR 500 crore (as of March 2021)
- Awards & Recognitions: Received numerous awards for operational excellence, safety, and sustainability.
Prominent Brands & Partners:
- Brands: “Corrtech” is the main brand, recognized for pipeline expertise.
- Subsidiaries: CEL leverages the Corrtech brand while specializing in precision components.
- Partnerships: Works with major oil and gas companies, engineering firms, and government agencies on various projects.
Milestones & Achievements:
- Successfully completed over 10,000 km of pipeline projects.
- Developed proprietary trenchless technology for environmentally friendly pipeline construction.
- Established CEL as a leading supplier of precision components to high-profile clients.
Competitive Advantages & USP:
- Experience & Expertise: Established track record, skilled workforce, and proven project execution capabilities.
- Integrated Services: Offers end-to-end solutions from construction to corrosion protection.
- Technological Innovation: Continuous investment in R&D for efficient and sustainable pipeline solutions.
- Diversification: Strong presence in multiple sectors strengthens financial stability.
Corrtech International Financials:
| Particulars | March-2022 | March-2021 | March-2020 |
|---|---|---|---|
| Total Assets | 766.32 | 618.99 | 594.77 |
| Total Expenses | 990.21 | 956.21 | 733.88 |
| Total Revenue | 1065.75 | 995.97 | 784.72 |
| Profit After Tax | 49.72 | 28.55 | 34.94 |
| EBITDA | 120.71 | 95.62 | 97.87 |
Lead Managers and Registrar for Corrtech International IPO:
Lead Managers:
- DAM Capital Advisors Limited:
Track record: Managed 14 IPOs in the past 2 years, including successful offerings for companies like Concord Enviro Systems Limited, Galaxy Surfactants Limited, and Astron Paper & Board Mills Limited.
- Equirus Capital Private Limited:
Track record: Extensive experience managing over 80 IPOs across various sectors, including recent successful offerings for Karda Therapeutics Limited, Chemcon Specialities Limited, and Amber Enterprises India Limited.
Registrar:
- Link Intime India Private Limited:
Role in the IPO process:
- Handles investor account management and share allotment.
- Processes refunds for unallocated bids.
- Facilitates dematerialization of shares after listing.
- Acts as a communication channel between the company and investors.
Potential Risks and Concerns for Corrtech International IPO:
Industry Headwinds:
The oil and gas industry, which is a major source of revenue for Corrtech, is cyclical and faces headwinds like fluctuations in oil prices, environmental regulations, and competition from renewable energy sources. These factors could impact the company’s future growth and profitability.
Company-Specific Challenges:
- Reliance on a few major customers: Corrtech’s dependence on a limited number of customers, primarily oil and gas companies, exposes them to the risk of losing significant revenue if contracts are terminated or renegotiated.
- Debt burden: The company has a significant debt load, which could limit its financial flexibility and impact its ability to invest in growth initiatives.
- Financial track record: While the company has shown improvement in recent years, its past history of loan defaults raises concerns about its financial stability and ability to manage debt.
- Competition: Corrtech faces intense competition from other established players in the pipeline laying and EPC services industry. This could put pressure on margins and limit growth potential.
Financial Health Analysis:
- Revenue: While Corrtech has reported revenue growth in recent years, it is important to analyze the sustainability of this growth and its dependence on specific projects or contracts.
- Profitability: The company’s profitability remains low compared to its peers. Investors should carefully assess the profitability margins and future growth projections to evaluate potential returns.
- Debt-to-equity ratio: The high debt-to-equity ratio indicates a significant reliance on debt financing, which can increase financial risk. Investors should examine the company’s debt repayment plan and its ability to manage its debt burden.
Conclusion:
While Corrtech International IPO presents an opportunity for potential growth, it is crucial to be aware of the associated risks and uncertainties. Investors should carefully analyze the company’s financial health, industry headwinds, and market volatility before making any investment decisions. Thorough due diligence and seeking professional advice are essential steps towards a well-informed investment choice.
Also Read: How to Apply for an IPO?
