ATC Energies System Limited, a leading manufacturer of customised Li-Ion battery packs, is launching its Initial Public Offering (IPO) worth ₹63.76 crores, set to open on March 25, 2025, and close on March 27, 2025. The IPO comprises a fresh issue of 43.23 lakh shares worth ₹51.01 crore and an offer for sale (OFS) of 10.80 lakh shares totaling ₹12.74 crore. This IPO will be listed on the NSE SME platform with a tentative listing date of April 2, 2025.

The price band for the IPO is fixed between ₹111 to ₹118 per equity share, with a lot size of 1,200 shares. Retail investors are required to make a minimum investment of ₹1,41,600, while High-Net-Worth Individuals (HNIs) must invest at least ₹2,83,200.

The market capitalisation of ATC Energies System Limited at the upper band of ₹118 per share is projected to be ₹240.58 crore. The book running lead manager is Indorient Financial Services Limited, KFIN Technologies Limited is the registrar, and Alacrity Securities Limited serves as the market maker.

Business Overview

Founded with a vision to become a global leader in battery technology, ATC Energies System is known for developing and manufacturing customised Li-Ion battery packs of various grades. The company is ranked among Asia's top 10 brands in terms of design and production capacity.

ATC’s batteries cater to diverse industrial applications with a focus on quality, customisation, and innovation. The company is supported by a skilled workforce and state-of-the-art facilities.

The promoter, Mr. Sandeep Gangabishan Bajoria, with 25 years of entrepreneurial experience, has been pivotal in the company's growth. His leadership and the dedication of the team have driven ATC to consistent growth.

Financial Performance

The company has shown a steady financial performance over recent years. Key figures include:

• Revenue from operations: ₹2,249.41 lakh (H1 FY25), ₹5,120.37 lakh (FY24), ₹3,313.54 lakh (FY23), ₹3,648.30 lakh (FY22)
• EBITDA: ₹825.42 lakh (H1 FY25), ₹1,547.37 lakh (FY24), ₹1,157.69 lakh (FY23), ₹1,532.92 lakh (FY22)
• Profit After Tax (PAT): ₹577.15 lakh (H1 FY25), ₹1,089.16 lakh (FY24), ₹775.57 lakh (FY23), ₹1,186.14 lakh (FY22)

Performance indicators show a pre-issue EPS of ₹6.78 and post-issue EPS of ₹5.34 for FY24. The pre-issue P/E ratio stands at 17.40x, and post-issue P/E at 22.09x, compared to an industry P/E of 31x. The Return on Capital Employed (ROCE) is 42.66%, while Return on Equity (ROE) and Return on Net Worth (RoNW) are both 39.38%.

Based on the latest financial data, the annualised EPS is ₹7.18, giving a P/E ratio of 16.43x. These numbers indicate a fairly priced IPO.

IPO Objectives

The company plans to utilise the IPO proceeds as follows:

1. ₹952.83 lakh for repayment/prepayment of borrowings related to Noida factory acquisition
2. ₹672.16 lakh for capital expenditure towards refurbishment and upgrades at Noida factory
3. ₹746.88 lakh for IT infrastructure upgrades at Noida factory, Vasai factory, and registered office
4. ₹950 lakh for working capital requirements
5. The remaining funds for general corporate purposes

Grey Market Premium (GMP) and Subscription

The GMP for ATC Energies System IPO is currently ₹0, reflecting no expected listing gains based on current market sentiment. It's important to note that GMP is not an official metric and is only an indication based on unorganised trading.

Anchor Investors

ATC Energies System raised ₹10.88 crore from anchor investors at ₹118 per share, allocating 9,22,800 equity shares. This indicates confidence among institutional investors, although it does not necessarily guarantee retail success.

IPO Review and Recommendation

While the company has strong fundamentals, good financials, and operates in a growth-oriented industry, the lack of GMP and neutral market sentiment suggest limited short-term gains. Additionally, the valuation is fair but not undervalued.

Investors are advised to exercise caution. The IPO is not recommended for listing gains and long-term investment should be considered only after further evaluation of post-listing performance.

The Upcoming IPOs in this week and coming weeks are Arisinfra Solutions Limited, Desco Infratech Limited, ATC Energies System Limited, Shri Ahimsa Naturals Limited,Identixweb Limited.

The Current active IPO are Rapid Fleet Management Services, Active Infrastructures Limited,Grand Continental Hotels.

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