Advanced Enzyme Technologies Ltd (AETL) IPO at a glance
Issue Highlights
Issue Period | 20/7/16-22/7/16 |
Price Band (Rs.) | 880-896 |
Issue Size(shares) # | 45,92,406 |
Issue Size (Rs. crore) | 412 |
Issue Type | 100% Book Built |
Face Value (Rs.) | 10 |
Listing | BSE,NSE |
Industry | Enzyme Industry |
Registrar | Link Intime India |
Minimum Bid Quantity | 16 |
Maximum Retail Subscription | Rs. 1,86,368 (13 lots) |
BRLM | ICICI Sec, Axis Capital |
# derived figure
Issue Details
Offer for Sale: 40,34,370 shares
Fresh Issue: Rs. 50 crore
Equity Shares Outstanding Prior to the Issue: 2,17,65,600
Equity Shares Outstanding After The Issue: 2,23,23,636
Objects of the Issue
(1) Investment in its wholly owned subsidiary AE USA for loan its loan repayment/pre-payment | Rs. 50 crore |
(2) General corporate purposes | NA |
Industry Profile
Simply put, enzyme is a protein molecule which is produced by all living organisms and it acts as a specialized catalyst which accelerates the bio-chemical reactions. These enzymes are harvested from living organisms like plants, animals, bacteria and fungi.
Usage of enzymes: Enzymes are classifies into two segments, namely Industrial and Specialty. Industrial enzymes are used in food & beverages, detergents, bio-fuel production, animal food and textiles, leather, pulp & paper, starch processing, etc whereas specialty enzymes are used in pharmaceutical, research & bio-technology, diagnostics and bio-catalysts.
The global enzyme market is worth (year 2012 figure) $ 5 billion of which industrial enzymes constitute 70 % of the world demand whereas specialty enzymes constitute 30 % of the same.
The annual growth of enzyme-demand is expected to stay in the 5%-6% range. Presently, USA is the largest consumer of the enzymes in the world accounting for the 37 % of the global demand.
Company Profile
Incorporated in 1989, AETL is the largest Indian enzyme company, engaged in the R&D, manufacturing and marketing of 400+ proprietary products developed from 60 indigenous enzymes. The company is ranked in the top 15 global companies in terms of enzyme sales. AETL primarily operates into 2 verticals- Healthcare & Nutrition (Human and animal) and Bio-processing (food & non-food). With its 6 manufacturing unit, fermentation capacity of AETL is 360 cubic meters. In the domestic market it is the second company in enzyme sales next only to Denmark based Novozymes-world’s largest enzyme company.
Risks & Threats
1. Significant dependence on North American subsidiaries
2. Pithampur SEZ tax benefits shall be ceasing from FY 2020
3. The growth CAGR of enzyme market is low at around 6 %
4. As 60 % of the revenue comes from abroad, strong rupee regime is not favorable for the company
Financial Profile #
Parameter | FY 16 annualized |
PEG (Profit, trailing 4 years) | 1.37 |
Net Profit Margin (%) | 25.3 |
Return on Capital Employed (%) | 36.8 |
Return on Equity (%) | 29.2 |
Total Liability to Net worth | .8 |
Price to Book Value | 8.3 |
Operating Cash to Net Profit | .9 |
TIE (Times Interest Earned) | 11.9 |
AR collection Period (Days) | 59.6 |
EV/EBITDA | 17.8 |
M-Cap to Sales | 7.2 |
Current Ratio | .9 |
Profit CAGR (%) | 20.8 |
# using annualized data at the upper end of the price-band
Comparison with the Peers #
Though There is no indigenous comparable peer but Biocon, as it offers some competition.
Just for the sake of comparison-
Parameters | PEG | NPM (%) | ROCE(%) | ROE(%) | EV/EBITDA |
AETL | 1.37 | 25 | 36.8 | 29.2 | 14.46 |
Biocon | .56 | 34.8 | 22.5 | 24.6 | 17.8 |
#moneycontrol data