Power Mech IPO attractively priced; subscribe: Hem Sec

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Power Mech Projects is an integrated power infrastructure services company in India providing comprehensive erection, testing and commissioning of boilers, turbines and generators (ETC-BTG) and balance of plant (BOP) works, civil works and operation and maintenance (O&M) services. Its operations include three principal business lines: (i) Erection Works; (ii) Operation & Maintenance Services; and (iii) Civil Works.

The Company has developed long term relationships with various Indian and international power utilities, governmental organizations and other power sector intermediaries. These clients include public sector undertakings and private sector clients. They have also established strong relationships with large EPC companies that operate in the power sector as well as other infrastructure and allied sectors. Its significant clients include BHEL, NTPC Limited, Doosan Power Systems India Private Limited, Adani Power Limited, L&T Ltd-Thermal Power Plant Construction BU, Thermal Powertech Corporation India Limited, GE Power Services (India) Private Limited, CLP India Private Limited, BGR Energy Systems Limited, Thermax Engineering Construction Co. Limited, SEW Infrastructure Limited, KSK – Arasmeta Captive Power Company Limited, KSK - VS Lignite Power Private Limited, KSK –Mahanadi Power Company Limited, Abir Infrastructure Private Limited, Siemens Limited and Reliance Infrastructure Limited.

Objects of the offer
Offer for sale: The funds from the Offer for Sale (net of issue related expenses) shall be received by the Selling shareholder and the company will not receive any proceeds.

Fresh issue: 1. Funding working capital requirements of the Company; and 2. General corporate purposes.

Valuation
"The company is bringing the issue at price band of Rs.615-640 at price-earnings multiple of 12.6-13.1 on post issue FY15EPS of Rs.48.54. Considering the strong client base, robust order book, efficient execution and firm fundamentals; the issue looks attractively priced. Hence we recommend investor to SUBSCRIBE the issue", says Hem Securities research report.