Strictly Private & Confidential
Perfect Infraengineers Limited
Initial Public Offering- SME Platform
Lead Managers
August, 2015
Disclaimer
This presentation is prepared solely for providing information about Perfect Infraengineers Limited (“PIL”).
No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness
or correctness of such information or opinions contained herein. None of the Company nor any of its respective affiliates, advisers or
representatives, including Keynote Corporate Services Limited (“Keynote”) & Small Industries Development Bank of India (SIDBI) and their
respective affiliates, shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this
presentation or its contents or otherwise arising in connection with this presentation.
The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based
on historical information or facts and may be "forward-looking statements", including those relating to the Company’s general business plans
and strategy, its future financial condition and growth prospects, and future developments in its industry and its competitive and regulatory
environment. Actual results may differ materially from these forward-looking statements due to a number of factors, including future
changes or developments in the Company’s business, its competitive environment, information technology and political, economic, legal and
social conditions in India.
For further details regarding the Company and the risk factors, investors are requested to refer to the Offer Document being prepared for the
purposes of the proposed IPO, before taking any investment decisions. This communication is for general information purposes only, without
regard to specific objectives, financial situations and needs of any particular person. Please note that investments in securities are subject to
risks including loss of principal amount. Keynote & SIDBI and their respective affiliates do not accept any liability whatsoever, direct or
indirect, that may arise from the use of the information herein.
This presentation does not constitute an offer or invitation to purchase or subscribe for any shares in the Company and neither any part of it
shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any decision to purchase shares in the
offering should be made solely on the basis of the information contained in the Offer Document to be published in due course in connection
with the offering. Keynote & SIDBI and iheir respective affiliates may from time to time perform investment banking or other services for, or
solicit investment banking or other business from, any entity mentioned in this presentation.
Securities of the Company have not been registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any US state,
nor is such registration contemplated.
The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person
of such revision or changes.
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Agenda
Company Overview
Industry
Financial Information
The Issue
Issue Summary
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Company Overview
Company Overview
•
Incorporated in 1996, Perfect Infraengineers Limited (‘Perfect Infra’) was initially
involved in selling and servicing air-condition systems, gradually diversified into
following verticals in which it is presently involved:
- Undertaking HVAC/ MEP turnkey projects & Renting of Air Conditioning systems
- Annual Maintenance Contracts (AMC)
•
Provided services to more than 7000 clients belonging to varied sectors viz; hospitality,
healthcare, educational institutions and infrastructure
•
One of the few companies qualified by Central Public Works Division (CPWD) of India for
both HVAC and electrical enabling it to bid and execute government projects
•
Has about 1225 tonnes (600 A/Cs) under rental contract with its customers present at
Mumbai and Navi Mumbai.
•
Has about 2700 customers (15000 Machines) Under Annual Maintenance Contracts(AMC)
spread over PAN India.
•
Has a strong order book position of over Rs. 5300 lacs
•
An ISO 9001:2008 certified company with a Team of 175 employees consisting of experienced
engineers, marketing executives and strong labour force
•
Established its presence in geographies outside India such as Nigeria and Tanzania, leveraging
its execution capabilities in the HVAC segment and completed projects with a total contract
value of about Rs. 1300 lacs.
•
Some of the key projects currently under execution includes Mantralaya – Government of
Maharashtra, SRM University (Gurgaon), RITES Limited (Hyderabad), Novotel (Lavasa), Jangid
Plaza Inc. (Tanzania), etc.
•
Plans to enter into fabrication of electric control panel through its subsidiary viz; Perfect
Control Panels Pvt. Limited (Perfect Control) which will enable it to have an assembly line of
electrical panels which can be used for the MEP projects handled by the Company or for
selling it to third party customers
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Offices
•
•
•
•
•
•
•
Navi Mumbai (Registered office & Factory)
Mumbai
Pune (Lavasa)
Thane
Ghaziabad
Hyderabad
Bhiwandi (Warehouse)
Business Associates
Business Portfolio
The business is divided into three different verticals.
MEP & HVAC Turnkey Projects
Renting of Air-conditioning Systems
Sales of Services
• Design, supply and installation of
ventilation, electrical and plumbing
solutions for all types of commercial,
industrial and domestic environments.
• Has significant experience as principal
contractors.
• Experience of undertaking government
projects and enjoy excellent client
base.
• This vertical generates around 90% of
the total revenue.
• Provides AC’s on rent to corporate
customers under 3 years contract.
• Undertakes AMCs which include
servicing and other maintenance
protocols.
• Helps the company by providing
constant revenue generation.
• A/C System rent
organized sector
economies.
market is an
in developed
• Cost efficient alternative
conditioner purchase
to
air
• Revenue from this vertical for the FY
2014-15 is Rs 89.41Lacs
• Revenue from this vertical for the FY
2014-15 is Rs. 2304.66 Lacs
• Has full fledged in-house team to
maintain and upkeep the installed
systems to increase their life and
efficiency.
• Complaint Redressal Teams are
equipped with tools and skills to
resolve issues immediately.
• A separate team for ‘Preventive
Maintenance’
conducts
maintenance at regular intervals.
• Revenue from this vertical for the FY
2014-15 is Rs 157.07 Lacs
Subsidiary: Perfect Control Panels Pvt Ltd
•
Perfect Infra has ventured into manufacturing / assembly of electrical control panels at its
existing premises at Rabale, Navi Mumbai through its subsidiary.
•
These panels are used in MEP projects executed by the company and also for sale to the
third parties/ customers.
•
This facility would ensure low cost and timely delivery of the panels in the MEP projects
executed by the Company.
6
Process Flow
Project Planning
Site Management
Design Team : Plans, Evaluates design, & Estimates material
requirement.
Project Team : Works on Time & Work schedules.
Procurement Team : Gets procurement schedule & cost
targets from design, project & site management team.
Admin Team : Works on cash flow and insurance process.
Service Team : Organizes all quality checks during the
execution.
Site Management Team :
Takes inputs from the design team and project team
and coordinates with fellow contractors.
 Prepares targets for timely execution, ensures that
the prerequisites are achieved by the fellow agencies
by way of constant interaction and co-ordination.
The site management team makes all efforts to meet
all the demands to complete the project.
After Sales Services
Project
Planning
 A service team is entrusted with the responsibility of
preliminary checks during the execution stage, as the
responsibility of after sales services lies with them.
 To ensure smooth operation, the team conducts
AMC and preventive maintenance at regular intervals
on the systems installed.
 The frequency depends on the nature of the project
and usage.
 The after sales service is as important as a good
quality execution.
Site
Management
After Sales
Service
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Client Base spread across various sectors.
Hospitality
Healthcare
Educational Institutions
Infra & Construction
HYATT Hotel, Hampi
Apollo Hospital (Lavasa Pune)
Delhi University
Mumbai Metro Rail
Mantralaya
Fortune Hotel ITC Group (Pune)
Me Cure Healthcare (Nigeria)
Bharat Diamond Brouse BKC
IIT Bombay
Le Meridian
Hirnandani Hospital, Mumbai
TIFR
Residential Complex at CWG
IISER (Pune)
Ibadan Healthcare (Nigeria)
ICAI, BKC (Mumbai)
Suncity Projects
Taj Hotel (Pune)
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JBCN International School
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Government Projects
IIITDM
Management Team
Name
Nimesh Mehta
Chairman & Managing Director
Background
• Has an Experience of more than 28 years in Mechanical, Electrical and Plumbing (MEP) contracts Heating,
Ventilating, and Air conditioning (HVAC) projects
• Is an MBA from Jamnalal Bajaj Institute of Management Studies, B.E (Mechanical) and has also cleared
‘Executive level’ of Cost and Works Accountancy
• His acumen in Marketing has helped the company to consolidate its position in the industry
Manisha Mehta
Whole Time Director &
Chief Financial Officer
• Is a Chartered Accountant with an experience of 20 years in finance related activities and statutory
compliances
• Has contributed in financial structuring of the Company
Sharmila Singh
• Associated with the Company for over a decade
Whole Time Director&
• Is a diploma holder in Secretarial Practice
Human Resources.
• Has expertise in the area of Human Resources and is responsible for the HR function of the Company
Pradeep Bhave
• Has an experience of 37 years which includes 15 years in Capital Markets and over 2 years as an advisor
for Banking, Finance and investment with focus on SME segment
Non Executive & Independent Director
• Has been associated with Punjab National Bank and IndusInd Bank by way of his employment
• Is also on the Board of Canara Bank Securities Limited since December 2013
Vinay Deshmukh
Non Executive & Independent Director
• Presently the CEO of Forbes Facility Services, has worked with Eureka Forbes Limited, Ion Exchange Ltd
and Godrej & Boyce, gathering an experience of 26 years
• Holds Bachelors degree in Mechanical Engineering and a Masters degree in Marketing Management
Vipul Vora
• Has done his engineering (Production) from VJTI, Mumbai
Non Executive & Independent Director
• Has an experience of about 23 years due to his association with Mukand Limited, Ispat Industries and
Nhava Sheva International Container Terminal pvt. Ltd., as an employee
• He is presently the proprietor of ‘My Port Services India’
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Organisational Structure
Board of Directors
CEO & MD
Director
Technical Electrical
Factory
(Perfect Control
Panels Pvt Ltd.)
Marketing
Executive
Panel
Assembly and
Testing
Engineer
CFO
&
Director Finance
Company
Secretary
Project Head
Civil & Plumbing
Division
Project
Manager
Manager
Chiller
Site Engineers
Project Head
Northern Region
Site
Manager
Director
(Human Resource)
HR
Executive
Finance
Assistant
Manager
VRV
Service Head
(Zone Wise)
Administration
Executive
Manager
Ducting
Accounts
Billing Head
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Industry
Industry Overview
•
•
•
•
•
•
•
Economic growth of the country is dependent on its supporting infrastructure.
Construction is a significant contributor to the economy, accounting for approximately 10% of GDP.
MEP (Mechanical, Electrical and Plumbing) is an important aspect of the construction sector, as it forms the second largest component
after civil works.
Almost all sectors like telecom, IT/ ITES, pharmaceuticals, education, aviation, financial services, power, hospitality and retail require a
conducive environment to perform efficiently and thus highlight the importance of the MEP industry.
MEP work constitutes the major cost of an in-built environment, with share of ~30-35% respectively of the total construction cost.
HVAC is estimated to have a share of 50% under MEP and rests are electrical and plumbing jobs.
Over the past few years, the industry has gradually progressed from offering mere HVAC to MEP solutions – in line with global norms.
Steps in a construction project:
Design
Feasibility Study
MEP Share in construction
MEP
civil works
35%
earthwork
design
study
handover
Source: IRR Advisory
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Earthwork
Civil Works
MEP
 The Government of India is in the process of launching
a new urban development mission. This will help
develop 500 cities, which include cities with
population of more than 100,000 people.
 Future cities of India will require smart real estate and
urban infrastructure.
 USD 1,000 Billion investments for infrastructure sector
are projected in 12th five year plan (2012-17).
 USD 650 Billion investments in urban infrastructure
are estimated over next 20 years.
-Make In India Website
 Government backing to the construction sector has
provided a major boost to the MEP industry.
12
Test & Handover
MEP Composition (%)
Plumbing
15%
Electrical
35%
Source: IRR Advisory
Mechanical
(HVAC)
50%
MEP Industry
Industry Structure
Industry Growth
300
INR Billion
254.2
CAGR :13%
250
200
150
124
100
50
0
2014
Source: IRR Advisory
2020 E
Industry Size
FY14
INR Billion
160
 The MEP players provide one-stop solution for manufacturing, contracting,
commissioning and after-sales service.
 MEP services market is highly fragmented with hundreds of contractors in India
with very few players having a pan-India presence.
 The MEP industry in India was valued at INR124bn in FY14. It is forecasted to grow
at a CAGR of 13% during FY14-20E to reach INR254.2bn.
 Similarly, individual electrical and plumbing industry are expected to increase at a
CAGR of 10% and 6% respectively during the same period.
142.5
120
100
82.5
80
60
13
31
40
41.3
10.5 12.6
20
0
Source: IRR Advisory
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FY17E
140
HVAC
Electrical
Plumbing
HVAC Industry
Entire Cooling System Framework
Industry
•
The major demand for HVAC systems is from the
construction and real estate industry.
As these two sectors are expanding their presence
across the country, there has been an increase in
demand for efficient HVAC systems.
Within these sector, the commercial, residential and
infrastructure subsectors extensively use HVAC
systems for maintaining comfort conditions.
With the government's continued focus on urban
development, the real estate industry is poised for
tremendous growth and is expected to touch
$265bn in 2020.
HVAC industry is expected to grow at a CAGR of 20%
during FY14-FY20E
Expanding population and greater economic activity
are the main triggers for its growth.
•
•
•
•
•
VRF Systems Sales (Number of Units)
60
55
In Thousands
45
50
37
40


In the DX systems, VRF systems are the most energy efficient; and
fierce competition in the segment has driven down prices.
Central HVAC systems, is dominated by AHU’s & FCU’s. However,
AHU’s are more popular in the Indian markets as compared to
FCU’s
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30
20
25
30
20
10
0
Source: IRR
Advisory
2012
2013
2014
2015E
2016E
2017E
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Financial Information
Financial Performance
Consistent Growth in Revenue
EBITDA
3,000
2,500
2,000
500
2,631
1,539
413
400
2,101
1,980
Rs in Lacs
1,564
300
1,500
200
216
232
219
2011
2012
2013
2014
200
1,000
100
500
-
2011
2012
2013
2014
2015
2015
Healthy Profit Margins
EBITDA margin (%)
PAT margin (%)
CAGR : EBITDA- 20% ; PAT- 22%
20%
15%
13%
16%
14%
12%
10%
5%
0%
2010
10%
6%
5%
4%
4%
2%
2011
2012
2013
2014
2015
2016
Excellent track record of continuous improvement in operating performance driven by increasing scale of operations
Revenue, EBITDA and PAT has witnessed a CAGR of 14%, 20% and 22% respectively over FY11-15. During the same period, EBITDA
margins have improved substantially by 213 bp
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Key Financials
)
Particulars
For the year Ended 31st March (Rs. in lacs )
2014
2013
2012
2011
355.1
318.3
189.0
198.3
139.3
90.1
0.7
530.2
452.4
467.3
350.5
382.9
359.9
213.5
203.5
127.9
68.9
143.4
76.1
510.8
428.8
356.9
279.6
2015
Tangible Assets
Long Term Borrowings
Short Term Borrowings
Share Capital
Reserves & Surplus
Net worth
Total Revenue
Total expenses
EBITDA
EBITDA margin (%)
PAT
PAT margin (%)
Ratios:
EPS (Rs.)
RONW (%)
NAV (Rs.)
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642.2
365.3
580.3
510.5
141.0
651.6
2,631.3
2,218.7
412.6
16%
156.4
6%
2,100.8
1,881.9
219.0
10%
32.0
2%
1,980.4
1,748.6
231.8
12%
70.9
4%
1,563.6
1,347.2
216.4
14%
69.7
4%
1,538.9
1,339.1
199.9
13%
69.6
5%
3.06
24.01
12.76
0.88
6.26
14.01
1.99
16.54
12.03
3.42
19.52
17.53
3.48
24.91
13.98
17
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Investment Rationale
Strategy
Perfect Infra intends to pursue the following principal strategies to optimize its competitive strengths.

Increased Focus on HVAC & MEP Services
Intend to continue strengthening the core business by deploying additional resources to increase brand visibility ,
penetration and provide high quality services.

Expansion of renting business
Renting business helps to maintain healthy revenue system which helps the company to venture out more in turnkey
projects.

Entry into manufacturing
The subsidiary complements the contracting business and help save project costs.

Increasing the company’s domestic and global client base
Company proposes to work on increasing its client base .

Focus on developing and growing cordial relations with Suppliers and Customers
Developing strong relationships with client helps to generate new business for the company through repeat orders.
Adapting to market changes is a key strategy required for the growth of this business.
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Investment Rationale
Established Client Base
Provide services to
clients across different
industries.
Value Proposition
Strong execution ability,
Operating efficiency &
experienced Board
Favorable Positioning
Well placed to seize
market opportunity
• Perfect Infraengineers Limited (PIL), an ISO 9001:2008 company, undertakes HVAC & MEP projects, rents air
conditioning systems and provides after sales service.
• Prestigious client base which is spread across different sectors like Infrastructure, Hospitality, Healthcare,
Educational Institutions, Commercial and Resident Complexes.
• Eligibility to bid for government tenders and has experience in executing international projects.
•
•
•
•
•
Robust financials over FY11-15 - Sales/ EBITDA has grown at a CAGR of 14%/ 20%.
Enjoys consistent growth in revenue, ever improving EBITDA, healthy profit margins and strong return ratios.
Healthy order book with projects lined up for the next 3 years.
Dedicated, experienced and technically sound management with lawyers and CEO on board.
Perfect Infra has an experienced management backed by a team of 35 engineers who are being updated/
trained with the latest methods/ technology through its in-house training program
• Indian construction sector is in a sweet spot and is estimated at Rs 245 Bn till FY2020.
• With 20 years experience in the business, Perfect Infraengineers has the expertise, manpower and existing
client base to seize the opportunity.
• One of the very few players in its segment having pan India presence and also catering to foreign clients.
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Investment Rationale
Presence in renting
space
In line with global trend
• Perfect Infra is already present in the business renting of air conditioners. Hence, the Company shall benefit
from the growing trend in India (in line with the global trend) for renting of Air condition system due to its cost
effectiveness
Future Growth
Expanding addressable
market and capacity
• The subsidiary ‘Perfect Control panels Pvt Ltd.’ manufactures Control Panels for HVAC/MEP projects which will
compliment its existing business.
• In-House Manufacturing helps save expenses thus increased profit margins.
• Increasing demand for replacement contracts of existing clients.
• The Company has received repeated orders from its old client viz_Lavasa
• Better chance of being awarded the regular AMC contract from its satisfied HVAC/MEP customers
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The IPO
Objects of the Issue
Cost of Project
The Objects of the Issue is to raise resources to part finance:
Expenditure Items
1. Part Financing the Working Capital requirement
• The industry in which the company operated is capital intensive
• Additional working capital is required for growing scope of business
and increase in the volume of activities
2.
Investment in subsidiary
• Proposes to invest Rs. 100.00 Lacs in its subsidiary viz; Perfect
Control
• The funding is proposed to be utilised to set-up a a facility for
manufacturing & assembling of electric panels (HT & LT)
• This facility shall enable it to have an in-house supply of panels
required for its MEP projects which would save expenses and ensure
timely delivery of the panels required in the projects, thereby
leading to an increased profitability for the company
• The panels are also be sold to the third parties & individual
customers
3.
Meeting the expenses of the issue
• The Issue related expenses consist of all expenses required for
listing the Equity Shares on the Stock Exchange.
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Amount
(Rs in Lacs)
Long term Working
Capital
425.00
Investment in subsidiary
100.00
Issue Expenses
[●]
Total
[●]
Means of Finance
Description
Proceeds of the Issue
Amount
(Rs in Lacs)
600.00
Internal Accruals
[●]
Total
[●]
Issue Summary
Transaction
:
Initial Public Offering by “Perfect Infraengineers”
Issue
:
Issue of [●] equity shares of face value of Rs. 10/- each at a premium of Rs. [●] per share
aggregating to Rs. 600 lacs
Issue Format
:
Fixed Price
Listing
:
The National Stock Exchange of India Limited (“NSE”) - SME platform i.e., “EMERGE”
Underwriting
:
100% of the Issue
Market Making
:
To be decided
IPO Grading
:
CRISIL has assigned a CRISIL SME fundamental grade of ‘SME 4/5’ (pronounced ‘SME four on five‘),
indicating superior fundamentals of the company as compared to other SMEs in India
Lead Managers
:
• Keynote Corporate Services Limited (“Keynote”)
• Small Industries Development Bank Of India (“SIDBI”)
Market Maker
:
To be appointed
Underwriters
:
Keynote Corporate Services Limited & Small Industries Development Bank Of India
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Thank You