Positron Energy Limited

Positron Energy Limited is engaged in Management & Technical Advisory Services of Oil and Gas Industry. They provide end to end solutions for Gas distribution to the Industries across India. They provide Management Consultancy Services like commercial and financial advisory, technical services including Project Management and O&M (Operation and Management) Services, across the Gas Sector in India. They have successfully developed a Gas aggregation business volume of 35 MMSCM (approx), especially Natural Gas. The Company is an ISO 9001:2015 and ISO 45001:2018 certified company. The quality certification is towards providing consultancy services, O&M services to the Oil & Gas sector. Since incorporation, they have provided services to major companies which are engaged in the Oil & Gas Sector, including both PSUs and private companies.  In addition to the operational endeavours, the business is secured with the Indian Gas Exchange (IGX) through its clearing member. This client membership enables them to source natural gas on-demand for the short-term requirements from the free market, where prices are determined through a transparent exchange mechanism. Moreover, it also provides flexibility to offload excess Gas if necessary. As at March 31, 2024, the portfolio includes a substantial daily volume of 4000-5000 MMBTU of gas from various sources.  The Company has entered into collaboration agreement with ICOM North America LLC (New Hudson, MI) for installation of ICOM Dual Fuel LNG conversion systems in on-road trucks weighing over 3.5 tons in India. The dual-fuel system allows for cost-effective operation with the flexibility of fuel ratios. The product has undergone thorough testing under Indian operating conditions, ensuring optimal performance and reliability. They are currently in the process of obtaining technical approvals from the Automotive Research Association of India (ARAI). As per financial performance, Positron Energy Limited has posted total income / net profits of Rs 8.96 Cr / Rs 0.57 Cr (FY22), Rs 52.02 Cr / Rs 2.12 Cr (FY23) and Rs 135.41 Cr / Rs 8.78 Cr (FY24). So as per previous financials data, company has shown good growth, but what will be future growth, that need to be tracked. Company has posted an average EPS of Rs 9.37 and average RoNW of 44.47% for last three fiscals. Issue is priced at a P/BV of 9.32 as per NAV of 26.82 as on 31.03.24. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 327.72, 89.29 and 21.62 respectively, which looks fully priced. As per RHP, there is no listed peers. On BRLM's front, Beeline Capital Advisors Private Limited is associated with this SME IPO and handled 44 IPOs in last 2 years. From last 10 IPOs, all opened above issue price or at par on the day of listing. As of now from last 10 IPOs, two are trading below issue price. ( As on 06.08.24 ) As per financials, Positron Energy Limited has shown good growth, RoNW is 59.01% and P/E is respectively 327.72, 89.29 and 21.62 as per FY22, FY23 and FY24 earnings. So, issue looks fully priced, but what will be future growth that need to be tracked. Company is engaged in Management & Technical Advisory Services of Oil and Gas Industry, which is almost exclusive business segment for the company. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Sujit K Sugathan
• 2 Mr. Rajiv Shankarankutty Menon
• 3 Mr. Manav Bahri