Transcript MERCHANT BANKING DIVISION BOB CAPITAL

Autoline Industries Limited
IPO
Presentation by
BOB Capital Markets Limited
(A wholly owned subsidiary of Bank of Baroda)
December 2006
The Issue
Name 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
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Autoline is engaged in the manufacture of
AUTO COMPONENTS :
SHEET METAL COMPONENTS
FORMED TUBULAR COMPONENTS
(Silencers & Exhaust Systems)
MAJOR ASSEMBLIES
SKIN PANELS
The Company
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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/TS16949:2002 certified
Locations
CHAKAN
114,000 sq feet of
built-up area on
land admeasuring
114,000 sq feet.
T-135 MIDC,
Bhosari
40,000 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
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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.
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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.
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Union Autoline Spare Parts LLC, UAE
UAE based JV company set to manufacture after market auto parts
for the Gulf region and African Markets.
Products
Financial Snapshot
31.03.2004
31.03.2005
(Rs Mn)
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
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
Interest
Technology
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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 designengineering 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
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“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.
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Auto Component Export
The 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.
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Large OEM’s
The 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
Mass
Manufacturing
Engineering
Design
Product
Design
Boutique
design
shops or
R&D
departments
of large
OEMs
Product
Development
Original
OEMs or
Equipment
Vendors
Manufacturers
Marketing
Tooling
OEMs or
Vendors
Prototyping
OEMs or
Vendors
OEMs or
Vendors
DEM Solution Providers
Sales
Delivery & Service
OEM dealer network
OEMs
Major Customers
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Tata Motors Ltd.
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Bajaj Auto Ltd.
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Mahindra & Mahindra Ltd.
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FIAT, India.
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Walker Exhaust (India) Pvt. Ltd.,
a wholly owned subsidiary of
TENNECO Group, USA
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Kinetic Engineering Ltd.
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Stokota Engee (I) Pvt. Ltd.
Board of Directors
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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)
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Total No of Shares
: 70,33,511
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Promoters
Private Equity
Others
: 56,39,188 (80.18%)
: 10,19,323 (14.49%)
: 3,75,000 (05.33%)
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Autoline proposes to raise Rs 750 Million
through the IPO
Autoline Industries Limited
Comparison with Peer Group
Rs.
Company
Capital
Net Worth
CE
crores
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
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
Automotive
Stampings
(ASAL)
* Eight Months results annualized
All Others 2005-06
Source Capitaline Database
Comparison with Peer Group
Source Capital Line
Price on 8th Dec 2006
Company
Autoline
EPS
BV
P/E
P/BV
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 world
Second largest two wheeler market in the world
Fourth largest passenger vehicle market in Asia
Fourth largest tractor market in the world
Fifth 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
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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)
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