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Avigo-Backed Tecpro Gets A Big Order Boost

01 November, 2010

Avigo Capital Partners backed material handling company Tecpro Systems has got a big boost as it bagged Rs 1,978 crore from APGENCO. The Gurgaon-based company, which got listed on October 12, received orders worth Rs 1,255 crore for Rayalaseema Thermal Power Project and Rs 723 crore for Kakatiya Thermal Power Project, the company said in a notice to the stock exchanges.

By when these orders will be executed is not clear. The companies like Tecpro get most of the revenue in Q3 and Q4 as most of the orders are finalised during these quarters. In an interview to CNBC TV18 last month, the company’s Vice Chairman and MD Amul Gabrani said that margins are generally “sustainable” in this business which is about 6.75-7% profit after tax.

Following the news of the order, the company stock price shot up by 10% to Rs 428 from Rs 389.15 on National Stock Exchange today. The company had priced its IPO at Rs 355, which went upto an all time high of Rs 458 before it corrected to the listing price levels. At today’s price, the company has a market capitalisation of Rs 2,150 crore.

Tecpro reported a total income of Rs 1485 crore with a net profit of Rs 110 crore in FY10.

The company, which has investors like Delhi-based SME focused fund Avigo Capital Partners, Credit Suisse, Kotak Mahindra Capital and Macquarie Asia Pacific Co- Investment Fund LP, is involved in the installation of conveyor systems and manufacture of equipment like crushers, screens, feeders, conveyor components like idlers and pulleys, besides structural steel fabrication.

In the IPO, one of the early financial investors in the company, Metmin Investments part exited its five-year-old investment in Tecpro Systems Limited with 7x returns. Metmin’s average cost of acquisition is pegged at Rs 51.25 per share and at latest price is sitting on 8.3x returns.

Credit Suisse and Kotak Mahindra invested at Rs 240 per share and are sitting on unrealised gains of around 80% in their three-year-old investment. Last year Macquarie Asia Pacific Co- Investment Fund LP also acquired shares from the promoters at Rs 240 a piece.


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Avigo-Backed Tecpro Gets A Big Order Boost

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