Fabtech Technologies IPO Cleanrooms Limited is launching its Initial Public Offering (IPO) on January 3, 2025, aiming to raise ₹27.74 crore through the issuance of 32.64 lakh fresh equity shares.
IPO Details:
- Issue Period: January 3, 2025 – January 7, 2025
- Price Band: ₹80 to ₹85 per share
- Lot Size: 1,600 shares
- Listing Platform: BSE SME
Allocation Structure:
- Qualified Institutional Buyers (QIBs): 50%
- Non-Institutional Investors (NIIs): 15%
- Retail Individual Investors (RIIs): 35%
- Market Maker Reservation: 1,64,800 shares
Company Overview:
Fabtech Technologies specializes in manufacturing and providing design-to-validation solutions for pre-engineered and pre-fabricated modular panels and doors, primarily serving the pharmaceutical, healthcare, and biotech sectors. Their product offerings are essential for constructing cleanrooms—controlled environments with low levels of pollutants. The company operates facilities in Umbergaon, Gujarat, and Murbad, Thane.
Financial Performance:
Revenue:
- FY23: ₹124.66 crore
- FY24: ₹97.39 crore
- H1 FY25: ₹61.92 crore
Profit After Tax (PAT):
- FY23: ₹7.96 crore
- FY24: ₹5.78 crore
- H1 FY25: ₹5.40 crore
Earnings Per Share (EPS):
- FY23: ₹9.53
- FY24: ₹6.92
- H1 FY25: ₹6.00 (not annualized)
Debt-Equity Ratio:
- FY23: 0.13
- FY24: 0.11
- H1 FY25: 0.05
The company has demonstrated financial stability with low debt levels and positive net asset value (NAV) growth. However, there has been a decline in revenue and profitability in FY24, attributed to changes in product mix and delayed shipments.
Utilization of IPO Proceeds:
- ₹14 crore for long-term working capital requirements
- ₹5.50 crore for acquiring equity shares of Kelvin Air Conditioning and Ventilation Systems Private Limited
- Remaining funds for general corporate purposes
Fabtech Technologies ipo Returns
Here’s an estimated returns table for the Fabtech Technologies IPO based on the listing scenarios:
| IPO Price (₹) | Lot Size | Investment (₹) | Listing Price (₹) | Profit/Loss Per Share (₹) | Total Return (₹) | Return on Investment (ROI %) |
| 80 (Lower Band) | 1,600 | 1,28,000 | 90 | 10 | 16,000 | 12.5% |
| 85 (Upper Band) | 1,600 | 1,36,000 | 90 | 5 | 8,000 | 5.88% |
| 85 (Upper Band) | 1,600 | 1,36,000 | 100 | 15 | 24,000 | 17.65% |
| 85 (Upper Band) | 1,600 | 1,36,000 | 75 | -10 | -16,000 | -11.76% |
Assumptions:
- Lot Size: 1,600 shares.
- Investment Amount: Calculated by multiplying lot size with IPO price.
- Listing Price Scenarios: ₹75, ₹90, and ₹100 per share.
Key Notes:
- Returns vary significantly based on the listing price. A listing at ₹90 per share yields moderate gains, while a lower-than-expected listing at ₹75 results in losses.
- Risk Consideration: SME IPOs like Fabtech Technologies may experience higher volatility on listing day.
Fabtech Technologies IPO Growth
To analyze the growth of Fabtech Technologies Cleanrooms Limited, we can consider the company’s revenue, profit, and other financial metrics over the last few years. Here’s a table summarizing key growth indicators:
| Year | Revenue (₹ Crore) | Profit After Tax (₹ Crore) | Profit Margin (%) | Earnings Per Share (₹) | Debt-Equity Ratio |
| FY23 | 124.66 | 7.96 | 6.39% | 9.53 | 0.13 |
| FY24 | 97.39 | 5.78 | 5.93% | 6.92 | 0.11 |
| H1 FY25 | 61.92 | 5.40 | 8.72% (annualized) | 6.00 (not annualized) | 0.05 |
Growth Observations:
Revenue:
- The revenue declined from ₹124.66 crore in FY23 to ₹97.39 crore in FY24, indicating a 21.9% drop, primarily attributed to changes in the product mix and delayed shipments.
- For H1 FY25, the revenue is ₹61.92 crore, suggesting a possible recovery if annualized.
Profit After Tax (PAT):
- PAT declined from ₹7.96 crore in FY23 to ₹5.78 crore in FY24 (approximately 27.4% decrease).
- H1 FY25 PAT is ₹5.40 crore, indicating significant improvement if the trend continues.
Profit Margin:
- Margins have improved in H1 FY25 to 8.72% (annualized), suggesting better cost control or higher efficiency.
Debt-Equity Ratio:
- A steady decline in the debt-equity ratio from 0.13 in FY23 to 0.05 in H1 FY25 indicates reduced leverage and better financial health.
Earnings Per Share (EPS):
- EPS followed a downward trend from FY23 to FY24 but has shown signs of stabilization in H1 FY25.
Growth Summary:
While the company faced challenges in FY24, the improvement of financial metrics in H1 FY25 signaled recovery. The declining debt-equity ratio and rising profit margins are positive indicators. Investors should monitor H2 FY25 performance and sector-specific growth trends for a clearer picture.
Strengths of Fabtech Technologies IPO:
(1) Established Niche Expertise:
- Fabtech Technologies specializes in modular cleanroom solutions, catering to industries like pharmaceuticals, healthcare, and biotechnology, which have high growth potential due to increasing demand for controlled environments.
(2) Growing Cleanroom Market:
- With stricter regulations and quality requirements in healthcare and pharma industries, the demand for cleanrooms is expected to rise, providing a favorable market landscape.
(3) Financial Stability:
- The company has a low debt-equity ratio (0.05 in H1 FY25) and positive earnings, reflecting financial prudence and stability.
(4) Strategic Acquisition:
- Plans to acquire equity in Kelvin Air Conditioning and Ventilation Systems Pvt Ltd can enhance its service portfolio and market reach.
Risks of Fabtech Technologies IPO:
Sector Dependency:
- The company heavily relies on the pharmaceutical, healthcare, and biotech industries. Any adverse developments in these sectors could negatively impact its business.
Revenue Volatility:
- Declining revenue in FY24 (from ₹124.66 crore to ₹97.39 crore) raises concerns about consistent growth, despite a potential recovery in FY25.
Pending Litigations:
- Legal proceedings involving the company and its promoters could pose financial and reputational risks.
SME IPO Risks:
- Being listed on the SME platform, the stock might face higher volatility and liquidity concerns compared to mainboard IPOs.
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