strictly private & confidential perfect infraengineers limited initial public offering- sme...

Strictly Private & Confidential

Perfect Infraengineers Limited

Initial Public Offering- SME Platform

August, 2015

Lead Managers


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

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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.

• Undertakes AMCs which include servicing and other maintenance protocols.

• 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

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• 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.

• Revenue from this vertical for the FY 2014-15 is Rs. 2304.66 Lacs

• Provides AC’s on rent to corporate customers under 3 years contract.

• Helps the company by providing constant revenue generation.

• A/C System rent market is an organized sector in developed economies.

• Cost efficient alternative to air conditioner purchase

• Revenue from this vertical for the FY 2014-15 is Rs 89.41Lacs

• 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.

MEP & HVAC Turnkey Projects Renting of Air-conditioning Systems Sales of Services

Subsidiary: Perfect Control Panels Pvt Ltd


Process Flow

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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.

Project Planning

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.

Site Management

After Sales Services

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.


Client Base spread across various sectors.

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Apollo Hospital (Lavasa Pune) Delhi University Mumbai Metro Rail

Bharat Diamond Brouse BKCMe Cure Healthcare (Nigeria)Fortune Hotel ITC Group (Pune)

Residential Complex at CWG

HYATT Hotel, Hampi

Hirnandani Hospital, MumbaiLe Meridian

Ibadan Healthcare (Nigeria)

IIT Bombay

TIFR

ICAI, BKC (Mumbai) Taj Hotel (Pune)

Hospitality Healthcare Educational Institutions Infra & Construction Government Projects

Mantralaya

IISER (Pune)

IIITDM

JBCN International School

Suncity Projects


Management Team

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Name Background

Nimesh Mehta

Chairman & Managing Director

• 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

Whole Time Director&

Human Resources.

• Associated with the Company for over a decade

• Is a diploma holder in Secretarial Practice

• Has expertise in the area of Human Resources and is responsible for the HR function of the Company

Pradeep Bhave

Non Executive & Independent Director

• 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

• 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


• 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

• 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’


Organisational Structure

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Board of Directors

CEO & MD

Director (Human Resource)

Project Head Northern Region

Project Manager

Project Head Civil & Plumbing

Division

CFO &

Director Finance

Director Technical Electrical

Factory (Perfect Control Panels

Pvt Ltd.)

Marketing Executive

Panel Assembly and

Testing Engineer

Company Secretary

Manager Chiller

Site Manager

HR Executive

Finance Assistant

Service Head(Zone Wise)

Manager Ducting

Site Engineers

ManagerVRV

Accounts Billing Head

AdministrationExecutive


Industry


Industry Overview

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• 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:

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.

Strictly Private & Confidential 13

MEP IndustryIndustry Structure

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.

Industry Growth

Industry Size


HVAC Industry

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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• 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.

Entire Cooling System Framework Industry

VRF Systems Sales (Number of Units)


Financial Information

Strictly Private & Confidential 16

Healthy Profit Margins

Consistent Growth in Revenue EBITDA

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

Financial Performance


Key Financials

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Particulars For the year Ended 31st March (Rs. in lacs ) 2015 2014 2013 2012 2011

Tangible Assets 642.2 355.1 318.3 189.0 198.3Long Term Borrowings 365.3 139.3 90.1 - 0.7Short Term Borrowings 580.3 530.2 452.4 467.3 350.5Share Capital 510.5 382.9 359.9 213.5 203.5Reserves & Surplus 141.0 127.9 68.9 143.4 76.1Net worth 651.6 510.8 428.8 356.9 279.6

Total Revenue 2,631.3 2,100.8 1,980.4 1,563.6 1,538.9 Total expenses 2,218.7 1,881.9 1,748.6 1,347.2 1,339.1 EBITDA 412.6 219.0 231.8 216.4 199.9 EBITDA margin (%) 16% 10% 12% 14% 13%PAT 156.4 32.0 70.9 69.7 69.6 PAT margin (%) 6% 2% 4% 4% 5%Ratios:EPS (Rs.) 3.06 0.88 1.99 3.42 3.48 RONW (%) 24.01 6.26 16.54 19.52 24.91NAV (Rs.) 12.76 14.01 12.03 17.53 13.98

)


Investment Rationale


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 .

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Strategy

Adapting to market changes is a key strategy required for the growth of this business.



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• 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.

Established Client BaseProvide services to

clients across different industries.

• 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

Value Proposition Strong execution ability,

Operating efficiency &

experienced Board

• 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.

Favorable Positioning Well placed to seize market opportunity



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• 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

Presence in renting space

In line with global trend

• 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

Future GrowthExpanding addressable

market and capacity


The IPO


Objects of the Issue

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The Objects of the Issue is to raise resources to part finance:

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.

Means of Finance

Cost of Project

Expenditure Items Amount (Rs in Lacs)

Long term Working Capital 425.00

Investment in subsidiary 100.00

Issue Expenses [●]

Total [●]

Description Amount (Rs in Lacs)

Proceeds of the Issue 600.00

Internal Accruals [●]

Total [●]


Issue Summary

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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


Thank You

strictly private & confidential perfect infraengineers limited initial public offering- sme...

Documents

project team

design team

procurement team

admin team

separate team

project site management

fledged inhouse team

constant revenue