The HVAX Technologies IPO is poised to open for bidding from September 27, 2024, to October 1, 2024. As a prominent player in the HVAC sector, the company has transformed its focus from project contracting to providing comprehensive engineering and controlled environment solutions. This blog post delves into the IPO details, company background, financial performance, strengths and risks, and investment considerations.
HVAX Technologies IPO Details
- Bidding Dates: September 27, 2024 – October 1, 2024
- Minimum Investment: ₹1,30,500
- Lot Size: 300 Shares
- Price Range: ₹435 – ₹458 per share
- Issue Size: ₹33.53 Crore
- Listing Date: October 7, 2024
- Face Value: ₹10 per share
About HVAX Technologies
Founded in 2010, HVAX Technologies has established itself as a specialist in heating, ventilation, and air conditioning (HVAC) systems. The company specializes in the engineering, procurement, and execution of controlled environment infrastructure, particularly cleanrooms for the pharmaceutical and healthcare sectors. Their turnkey solutions encompass a wide array of products, including cleanroom wall and ceiling panels, air handling units, chillers, and building management systems.
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Strengths of HVAX Technologies
- Proven Track Record: HVAX Technologies has successfully completed around 200 projects in India and 15 other countries, demonstrating its international reach and operational capability.
- Diverse Service Offerings: The company provides comprehensive services in design, engineering, and consultancy, including technology transfer and project feasibility studies tailored for the pharmaceutical sector.
- Quality Certifications: HVAX Technologies is ISO 9001:2015 certified, indicating a commitment to quality management that aligns with industry standards.
- Strong Order Book: As of August 1, 2024, the company boasts an impressive order book valued at approximately ₹153.64 crore, indicating a healthy pipeline of future revenue.
- Consistent Financial Growth: The company has shown a steady increase in revenue and profits, with revenue from operations rising from ₹68.26 crore in FY22 to ₹106.06 crore in FY24. PAT has also seen significant growth, increasing from ₹4.18 crore to ₹9.39 crore during the same period.
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Risks and Challenges
While HVAX Technologies has strong fundamentals, potential investors should be aware of the following risks:
- Customer Concentration: A substantial portion of the company’s revenue is generated from a few key customers, with the top 10 clients accounting for approximately 69.10% to 89.46% of revenue in recent years. Losing a major customer could significantly impact revenue streams.
- Supplier Dependence: Similarly, the company relies heavily on a limited number of suppliers. The top 10 suppliers accounted for over 56% of total purchases. Any disruption in supplier relationships could hinder operations.
- Market Relationship Dynamics: HVAX Technologies generates a significant portion of new orders through relationships with existing customers. A decline in customer satisfaction or inability to attract new clients may adversely affect future revenues.
- Debt Levels: As of March 31, 2024, total borrowings amounted to ₹24.37 crore. The company’s ability to manage and repay its debts is crucial for maintaining financial health.
- Legal Proceedings: Ongoing legal issues involving the company, its promoters, and directors could pose risks, depending on the outcomes of those cases.
Financial Performance
Let’s take a closer look at HVAX Technologies’ financial metrics over the past few years:
Revenue Growth
| Fiscal Year | Revenue (₹ Cr) | Profit (₹ Cr) |
|---|---|---|
| FY22 | 68.26 | 4.18 |
| FY23 | 95.93 | 5.20 |
| FY24 | 106.06 | 9.39 |
Total Assets
| Fiscal Year | Total Assets (₹ Cr) |
|---|---|
| FY22 | 53.87 |
| FY23 | 78.25 |
| FY24 | 63.66 |
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Application Details
Investors interested in the HVAX Technologies IPO can find key application details below:
- Regular Investors: Minimum application of ₹435 to ₹458 per share for up to ₹2 Lakh.
- High Networth Individuals (HNIs): Can apply for ₹2 – 5 Lakh.
Lot Size Breakdown:
| Application Type | Lots | Shares | Amount |
|---|---|---|---|
| Retail (Min) | 1 | 300 | ₹137,400 |
| HNI (Min) | 2 | 600 | ₹274,800 |
Key Performance Indicators (KPI)
As of March 31, 2024, here are some critical financial metrics for HVAX Technologies:
- Market Capitalization: ₹127.18 Crore
- Return on Equity (ROE): 39.29%
- Return on Capital Employed (ROCE): 25.17%
- Debt/Equity Ratio: 0.8
- Profit Margin: 8.85%
Objectives of the IPO
The funds raised from the HVAX Technologies IPO will be utilized for:
- Funding working capital requirements.
- General corporate purposes.
Should You Apply for the HVAX Technologies IPO?
Investment Verdict: [May Apply]
According to market expert Dilip Davda, HVAX Technologies is positioned well in the HVAC contracting sector, particularly within the pharmaceutical and healthcare industries. The company has demonstrated solid growth in both revenue and profit, although concerns about net margins persist. Based on FY24 earnings, the IPO seems fully priced, and the smaller equity capital post-IPO could suggest a longer gestation period. Investors with a strong understanding of the market may consider this IPO for medium-term investment.
HVAX Technologies IPO Registrar
- Registrar: Kfin Technologies Limited
- Phone: 04067162222, 04079611000
- Email: hvax.ipo@kfintech.com
- Website: Kfin Technologies