HVAX Technologies Ltd. (HTL) is making waves with its upcoming IPO, opening for subscription on September 27, 2024, and closing on October 1, 2024. As a specialized player in the HVAC project contracting space, HTL offers turnkey solutions for controlled environment infrastructure and cleanrooms, mainly for pharmaceutical, healthcare, and biotech industries. It also extends its services to chemical companies, hospitals, and FMCG clients. With over 200 completed projects across 15 countries, HVAX Technologies has steadily carved a niche in a growing market.
What sets HTL apart is its ability to offer end-to-end solutions—from design, procurement, and installation to testing and operational support. The company also engages in engineering consultancy and technology transfer services for pharma clients, enhancing its comprehensive portfolio.
IPO Details and Objectives
HVAX is entering the market with a book-building IPO of 7.32 million equity shares at a price band of INR 435-INR 458 per share, aiming to raise INR 33.53 crore. The minimum application size is 300 shares, with a post-allotment listing planned on NSE SME Emerge. The IPO constitutes 26.36% of the post-IPO paid-up capital, and the company plans to allocate INR 21.70 crore of the proceeds towards working capital, while the remainder will be used for general corporate purposes.
Financial Performance
HVAX has shown steady growth in both revenue and profit over the past three fiscal years. In FY22, the company reported revenue of INR 68.79 crore and a net profit of INR 4.18 crore. By FY24, revenue had grown to INR 107.47 crore with a net profit of INR 9.39 crore. The company’s average earnings per share (EPS) for the past three years is INR 32.15, with an impressive return on net worth (RoNW) of 31.23%. However, net margins, while improving, remain a concern.
At the upper cap of the price band, the company’s price-to-earnings (P/E) ratio stands at 13.54 for FY24, making it appear fully priced compared to its peers. HVAX's post-IPO market cap is projected at INR 127.18 crore.
Should You Invest?
While HVAX has demonstrated solid growth and a strong presence in the cleanroom infrastructure market, concerns about margin sustainability and its relatively small post-IPO equity capital may raise red flags for investors. The issue appears fairly priced, with a longer-term investment horizon likely required for significant returns. Investors looking for medium-term opportunities may find this IPO appealing, but it’s important to weigh the risks against potential rewards.
For those considering the IPO, a detailed look at the company’s financials and growth strategy will be key to making an informed decision.
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