FALCON TECHNOPROJECTS INDIA IPO Review

Falcon Technoprojects India Limited is engaged in the business of providing Mechanical, Electrical and Plumbing (“MEP”) services to our PAN India customers which are operating in various sectors including Petroleum Refineries, Residential Townships, Atomic Energy, Civil Construction, and many more.

Falcon Technoprojects is promoted by Mr. Bharat Shreekishan Parihar and Mrs. Sheetal Bharat Parihar and has an experience of more than 16 years in the MEP sector having worked across many industries including projects in Petroleum Refinery Industry, Real Estate, Renewable Energy with respect to Mechanical, Electrical and Plumbing for domestic market.

Financially, Falcon Technoprojects revenue increased from ₹ 943.14 Lakhs in FY21 to ₹ 2,286.19 in FY22 but fallen in FY23 to ₹ 1,653.50 Lakhs and currently landing at ₹ 1,033.81 Lakhs for the 10MFY24. Similarly, EBITDA rose from ₹ 105.12 Lakhs in FY21 to ₹ 220.14 Lakhs in FY22 and further to ₹ 241.79 Lakhs in FY23 and then currently at ₹ 195.31 Lakhs for the 10MFY24. This indicates steady growth in financial performance. 

For the Falcon Technoprojects IPO, the company is issuing shares at a pre-issue EPS of ₹ 3.10 and a post-issue EPS of ₹ 1.94. The pre-issue P/E ratio is 29.66x, while the post-issue P/E ratio is 47.22x against the construction industry P/E ratio of 35x. The company's ROCE for 10MFY24 is 11.54%, and ROE for 10MFY24 is 9.68%. These metrics suggest that the IPO is over priced and nothing much left for the investors on the table. The company doesn't have directly listed players but some small unlisted companies like BR MEP Engineers Private Limited & PillarPlus Private Limited in MEP segment have performed very well over the period of FY20-22 and shown huge profit growth on small base.

The Grey Market Premium (GMP) indicates potential listing loss of 20% - 25%. Given the company's financial performance and the valuation of the IPO, we recommend Investors NOT APPLY in the IPO for listing gains or long term Investment purposes.