Atlas Copco India Pre IPO (Unlisted Shares) Review

Atlas Copco India, established in 1960, is a manufacturer of innovative solutions in air compressors and industrial gases, energy-efficient vacuum pumps, portable compressors, light towers, and generators, ergonomically designed industrial tools and assembly systems.

Let’s have a detailed review of Atlas Copco India Limited IPO covering its release date, IPO offer price, subscription, Atlas Copco India Limited unlisted shares IPO allotment, grey market price, and other details like the company’s background, its financial positions, and its other related things.

Summary of Atlas Copco India Review

  • The company’s expertise in operational excellence makes it an ideal partner in nation-building projects, fuelling economic growth, and prosperity.
  • Atlas Copco’s products and solutions help its customers achieve continuous improvements in efficiency and productivity in a wide range of industry segments including general engineering, aerospace, automotive, manufacturing and process industries, oil and gas, construction, food and beverage, entertainment, among others.
  • Atlas Copco India Limited is a wholly-owned subsidiary of Atlas Copco AB which owns 96.32% shares of Atlas Copco India Limited.
  • Atlas Copco is a global, industrial company based in Stockholm, Sweden, with approximately 39 000 employees and customers in more than 180 countries.
  • Atlas Copco announced in January 2017 that the Group would split into two companies in 2018: Atlas Copco, focusing on industrial customers, and Epiroc, focusing on mining, infrastructure, and natural resources customers.
  • In the U.S., Epiroc began operating as an independent business on Dec. 1, 2017.
ISIN: INE445A01019Face Value: ₹ 10
Total Income: ₹ 2709 CrBasic EPS: ₹ 144.15
Profit after Tax: ₹ 325 CrD/E:

Company Overview

CIN: U27106PN1960PLC020566Reg Date: 28th January, 1960
Sector: Commercial and Industrial ManufacturingSub-Industry: Pumping, mining and construction machinery
Reg Office: Sevanagar, Mumbai-Pune Road, Dapodi, Pune, MaharashtraWebsite: www.atlascopco.com

Products & Services of Atlas Copco India Limited

  • Manufactures – Pumps, Compressors, Taps, and valves.
  • Manufactures – Mining/quarrying and construction machinery.

Board of Directors of Atlas Copco India

NameDesignation
Mr. Giovanni ValentManaging Director
Mr. Suresh GhotageChief Financial Officer
Mr. Anant BavareCompany Secretary

Shareholding Pattern of Atlas Copco India

Atlas Copco India shareholding pattern
Source: Atlas Copco India Limited Annual report 2018-19

Industry Overview

  • India has emerged as the fastest-growing major economy in the world as per the Central Statistics Organization and International Monetary Fund (IMF) and is expected to be one of the top three economic powers of the world over the next 10-15 years.
  • However, the IMF lowered India’s economic growth forecast to 4.8 percent for this fiscal year owing to the crisis in the non-banking financial sector and weak rural demand. RBI also lowered its growth projection for the fiscal year to 6.1% from 6.9%.
  • Another economic tsunami apart from NBFC and Yes Bank Crisis for the Indian economy is going to be the Covid-19 pandemic which even though it may not be able to make the country slip into a recession but could impact the Indian economy significantly.

Future Outlook

  • Atlas Copco manufactures and sells Air pumps and compressors in India.
  • The long term outlook for the Indian Air Compressor market looks promising as the market is expected to grow at a CAGR of 6.92% between 2020 and 2025. (Source: Industry ARC Market Report)

Growth Drivers

  • Technological Innovations and high demand for portable air compressors
  • Growing demand for air compressors from end-user industries such as automotive, power and other manufacturing industries
  • The rise in adoption of robust and energy-efficient equipment

Market Landscape

  • Product launches, acquisitions, and R&D activities are the key strategies adopted by players in the Indian Air Compressor market.
  • Top 10 companies operating in the market are Ingersoll-Rand plc, ELGi, Emerson Electric Co, Hitachi Ltd, Bauer Compressors Inc, Atlas Copco AB, Kaeser Compressors, Indo-Air Compressors Pvt Ltd, Quincy Compressor, and MK Engineering.
  • In July 2019, Atlas Copco had launched five new air compressors for the small and medium scale business units of the Indian market and that can be applied in industries such as food and beverage, metal, cement, textile, foundry & forging, general engineering, auto & ancillaries, paper and many others which set to drive the demand of Indian Air Compressors market.

Financial Snapshot of Atlas Copco India

Atlas Copco India financials
Source: Annual Reports (in ₹ Crores)
Atlas Copco India EBITDA
Source: Annual Reports (in ₹ Crores)
Atlas Copco India Assets
Source: Annual Reports (in ₹ Crores)
Atlas Copco India Equity
Source: Annual Reports (in ₹ Crores)
Atlas Copco India Operating Margin
Atlas Copco India profit after tax
Source: Annual Reports (in ₹ Crores)
Atlas Copco India EPS - Earning per share
Source: Annual Reports (₹ per share)
Atlas Copco India Return on Equity ROE

Cash Flows

Atlas Copco India- Cash flow
Source: Annual Reports (in ₹ Crores)
Particulars2019201820172016
Cash flow from operating activities242.47279.57314.49330.01
Cash flow from investing activities(70.08)(267.53)(133.55)511.73
Cash flow from financing activities(178.40)11.36(188.74)(854.11)
Net inc/(dec) in cash and cash equivalents(6.01)23.41(7.8)(12.37)
Source: Atlas Copco India Limited Annual Reports (in ₹ Crores)

Peer Comparison of the company

Peer / competitor comparison analysis
 Return on Equity (ROE)
Atlas Copco India Price to Equity PE Ratio
 Price to book P/B ratio
EV/ EBITDA Ratio

Our Review

  • On 12th May 2017, the company approved the sale of Road Construction Business (which constitutes 6% of the total turnover of the company) to Dynapac Road Construction Equipment India Private Limited. The company also transferred the assets and liabilities of this business to Dynapac India.

Positives

  • The company’s ROE has been highest among its peers for FY18 and FY19.
  • The company is trading at a lower PE compared to its peers.
  • The company is trading at a lower EV/EBITDA ratio compared to its peers.

Negatives

  • The company’s cash flow from operating activities has been decreasing continuously from 2016 to 2019.
  • The company is trading at a higher P/B ratio compared to its peers.
  • The company’s Total Income from 2016 to 2019 has stayed almost constant and has not shown any significant growth.
  • The company’s EBITDA has decreased from ₹ 524 Cr in 2016 to ₹ 507 Cr in 2019.
  • The operating margin has also not shown any significant improvement from 2016 to 2019.
  • ROE over a period of 3 years has decreased from 35% to 30%.

Atlas Copco India IPO Allotment Status, Subscription, Price, Date

Atlas Copco India Limited IPO date has not been released yet. Once the IPO date has been issued, the subscription details will be updated regularly. The Allotment status will be announced about 3-4 weeks of the IPO issue date. The price band of the IPO will be known only after the offer price of the IPO issues is known. One can know about the price band of the IPO in about a week.

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