Autoline Industries Limited IPO Presentation by BOB Capital Markets Limited
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Transcript of Autoline Industries Limited IPO Presentation by BOB Capital Markets Limited
Autoline Industries Limited
IPO
Presentation by
BOB Capital Markets Limited(A wholly owned subsidiary of Bank of Baroda)
December 2006
The IssueName of Company Autoline Industries Limited
Issue Size & Type Rs. 75 Crores
BOOK BUILT
BRLM BOBCAPITAL
Syndicate Member ENAM Securities Pvt. Ltd.
Price Band Rs 200 – 225
Issue Opening/Closing 8th Jan 07 – 12th Jan 07
Business Sector
Autoline is engaged in the manufacture of AUTO COMPONENTS :
SHEET METAL COMPONENTS FORMED TUBULAR COMPONENTS
(Silencers & Exhaust Systems) MAJOR ASSEMBLIES SKIN PANELS
The Company
Started operations in 1995 as Autoline Pressings/Autoline Stampings Pvt. Ltd.
Became public limited in January 2006 under the present name
Has 5 manufacturing locations in Pune, all of which are ISO/TS- 16949:2002 certified
Locations
CHAKAN114,000 sq feet of built-up area on land admeasuring 114,000 sq feet.
T-135 MIDC, Bhosari40,000 sq feet of built up area on land admeasuring 53,000 sq feet.
KUDALWADI 10,000 sq feet of built up area on land admeasuring 10,000 sq feet.
Subsidiaries/ Joint Ventures
Western Pressing Private Limited Manufactures Formed Tubular Products, Cross Members, Silencers
and Exhaust Systems. This was acquired as a wholly owned subsidiary in November 2005. Operations merged with Autoline from 1st April 2006.
Autoline Dimensions Software Private Limited Formerly known as Dimension Engineering Software Services Private Limited, it got its present name after Autoline took a 51% stake in March 2006, with a view to become a “Concept to Delivery Company”. ADSPL is into CAD/CAE & Design Engineering Services.
Union Autoline Spare Parts LLC, UAE UAE based JV company set to manufacture after market auto parts
for the Gulf region and African Markets.
Financial Snapshot (Rs Mn)
31.03.2004 31.03.2005 31.03.2006 30.11.2006
Equity Capital 40.09 60.14 69.45 70.34
Reserves 25.05 20.04 134.77 219.57
Secured Loans 178.21 216.91 312.79 310.55
Net Fixed Assets
210.49 305.53 527.28 707.32
Income (Sales) 510.81 684.82 1113.26 1182.81
Interest 15.50 16.22 17.57 15.01
Depreciation 9.90 14.74 21.06 17.12
Profit Before Tax
5.93 19.80 77.04 84.53
Tax/Provision for Tax
0.50 1.60 6.92 9.74
Net Profit 5.43 18.20 70.13 74.80
EPS (Rs.) diluted
1.36 3.63 10.82 16.05
Technology
Design Process Optimization & Finite Element Analysis Modeling Through MoU for technical collaboration of
Detroit Engineered Products, Autoline has access to a suite of proprietary tools and design-engineering platforms (Meshworks) and software tools that reduce design cycle time from six months to approximately six weeks. The company plans to improve on its “Meshworks” Platform to develop additional productivity enhancement mechanisms for the automobile design industry.
Strategy “Art to Part” manufacturing solution for specialized Vehicles
The company has identified components and assemblies which are needed to be re-engineered for local conditions. The company caters to OEM’s of these specialized vehicle manufactures like Stokota (Belgium) and is in advanced negotiations with other companies in Europe and the United States.
Auto Component ExportThe company is targeting the export market with low cost – high quality components like brake shoe assemblies and exhaust systems. The primary target markets for these products is the US, Middle East, Africa and Europe. The company expects that within the next 24 months, 15% of sales revenue will be contributed by auto components exports. Additionally due to comparative advantage economies associated with export from India to developing markets, the company expects to see significant improvement in its profitability.
Large OEM’sThe company will continue to drive revenue from large OEM’s through its cost effective manufacturing, to increase top line revenue and drive economies of scale. The company expects that 50% of the sales revenue will continue to be derived by billing to domestic OEM’s.
Value Chain Focus
Product Design
Product Development
Engineering Design
Tooling Prototyping
Mass Manufacturing
Marketing Sales Delivery & Service
DEM Solution Providers
Boutique design shops or R&D departments of large OEMs
Original Equipment Manufacturers
OEMs or Vendors
OEMs or Vendors
OEMs or Vendors
OEMs or Vendors OEMs
OEM dealer network
Major Customers
Tata Motors Ltd.
Bajaj Auto Ltd.
Mahindra & Mahindra Ltd.
FIAT, India.
Walker Exhaust (India) Pvt. Ltd., a wholly owned subsidiary of TENNECO Group, USA
Kinetic Engineering Ltd.
Stokota Engee (I) Pvt. Ltd.
Board of Directors
Mr Vikram Bhat Mr Shivaji Akhade Mr Sudhir Mungase Mr M Radhakrishnan Mr Gopal Patwardhan Mr Ajit Karnik CA Vijay Thanawala Mr Prakash Nimbalkar Mr Abraham Koshy Mr Stanton Dodson
Capital Structure
(Face Value / Share : Rs 10) Total No of Shares : 70,33,511
Promoters : 56,39,188 (80.18%) Private Equity : 10,19,323 (14.49%) Others : 3,75,000 (05.33%)
Autoline proposes to raise Rs 750 Millionthrough the IPO
Autoline Industries Limited Comparison with Peer Group
* Eight Months results annualizedAll Others 2005-06Source Capitaline Database
Rs. crores
Company Capital Net Worth CE Sales Net Profit
Autoline* 7.03 29.88 88.44 177.42 11.22
JBM 6.80 30.66 52.30 111.18 6.74
Automotive Stampings (ASAL) 10.20 46.37 82.88 276.79 4.50
Automotive Corp of Goa (ACGL) 4.94 22.64 36.49 253.98 15.22
Rasandik 4.73 21.83 77.80 147.83 4.95
Comparison with Peer Group
Source Capital Line
Price on 8th Dec 2006
Company EPS BV P/E P/BV
Autoline 15.95 42.44 NA NA
JBM 8.57 41.28 10.30 1.94
Automotive Stampings (ASAL) 2.77 46.20 33.20 2.55
Automotive Corp of Goa (ACGL) 28.54 27.21 15.90 16.54
Rasandik 10.30 46.15 12.80 2.86
The Indian Automotive Industry
Industry Snapshot:Largest three wheeler market in the worldSecond largest two wheeler market in the worldFourth largest passenger vehicle market in AsiaFourth largest tractor market in the worldFifth largest commercial market in the world
The automotive sector comprises the Original Equipment Manufacturers (OEMs) and auto component manufacturers.
The domestic automobile market has been growing at 14.2 percent CAGR over 4 years (2000-01 to 2004-05), while the auto components market has been growing at 19.2 percent CAGR (2000-01 to 2003-04).
With almost 24 percent growth in car sales in 2004, India has emerged as the fastest growing car market in the world, outstripping China's estimated 13.7 percent growth last year.Source ACMA
The Indian Automotive Industry The output of auto component industry in India
has increased at a CAGR of around 25 percent for the past three years from US$ 4.45 billion in 2002 to US$ 8.7 billion in 2005. Investments in this sector have increased from US$ 2.3 billion in 2002 to US$ 4 billion in 2005, a CAGR of 20 percent.
The exports of automobiles from India have been growing at a CAGR of 39 percent for the past four years.
Auto component exports from India grew from US$ 760 million in 2002-03 to an estimated US$ 1.4 billion in 2004-05 and estimated to be around US$ 20-25 billion by 2015.
India is also emerging as an outsourcing hub for global majors. Companies like GM, Ford, Toyota and Hyundai are implementing their expansion plans in the current year. While Ford and Toyota continue to leverage India as a source of components, Hyundai and Suzuki have identified India as a global source for specific small car models. Auto majors like General Motors (300 Acres), Volkswagens (500 Acres), Daimler Chrysler (200 Acres) are all setting up plants at Chakan, Pune. (Source ACMA)