Risk Analysis of Patil Automation
Patil Automation Limited, a Pune-based industrial automation manufacturer specializing in welding and line automation systems since 2015, is launching its Initial Public Offering (IPO) to fund expansion and strengthen its position in the growing automation market.
Patil Automation Limited IPO Details
Face Value: ₹ 10 per share
Price Band: ₹ 114–120 per share
Total Issue Size: 5,800,800 fresh equity shares aggregating to ₹ 69.61 crore
Issue Type: Fresh Issue via Book Building (no offer for sale).
Listing Platform: NSE SME (Emerge).
Market Maker: Mansi Share & Stock Broking (reserving 292,800 shares).
Lead Manager: Seren Capital Private Ltd.
Registrar: Purva Sharegistry (India) Pvt Ltd.
Promoters: Manoj Pandurang Patil, Aarti Manoj Patil, Prafulla Pandurang Patil.
Share Holding Pre‑Issue: Promoters and group – approx. 94.38%.
Share Holding Post‑Issue: NA
IPO Timeline
Opening Date: June 16, 2025
Closing Date: June 18, 2025.
Basis of Allotment: June 19, 2025
Refund Initiation: June 20, 2025
Credit of Shares to Demat: June 20, 2025
Listing Date: June 23, 2025
Company Overview
Patil Automation offers customized automation solutions—robotic welding, assembly lines, conveyor systems, inspection machines, and AGVs—primarily serving automotive OEMs, Tier‑I suppliers, plus electronics and general manufacturing across 10 states. It runs five facilities (two in Pune) over a 460,000 sq ft operational footprint.
Objects of the Issue
Proceeds are earmarked for:
₹ 62.01 crore to build a new manufacturing facility
₹ 4 crore to repay debt
The remaining amount (~₹ 3.6 crore) is for general corporate purposes.
Risk Factors
Market Reception: SME IPOs often see modest initial uptake—Day 1 subscription at 35–50% with a grey-market premium (GMP) of 18–23% suggests subdued retail appetite.
Concentrated Promoter Control: Even after dilution, promoters retain ~74%, limiting public float transparency.
Specialized Sector Vulnerability: Demand is tied to capital goods cyclical cycles (like automotive/EVC), and execution risks remain in new facility construction and client onboarding.
Market Landscape & Growth Drivers
The industrial automation market in India is projected to grow at a CAGR of ~14.2% (2024‑29), from USD 15.12 bn to USD 29.43 bn. Key sector drivers include EV production, defense modernization, and automotive manufacturing automation mandates.
Competitor Comparison
Primary peer: Affordable Robotic & Automation Ltd (listed SME). While not an exhaustive peer set, it provides a benchmark in scale and offering variety.
Competitive Strengths
Tailored Solutions Expertise: End‑to‑end automation—from welding to inspection—built in‑house.
Strong Financial Metrics: FY25 revenue ₹ 118.05 crore; PAT ₹ 11.7 crore; EBITDA ₹ 15.2 crore; PAT margin ~9.9%; ROE ~27%.
Anchor Backing: Raised ₹ 19.81 crore from 11 prominent anchor investors at ₹ 120/share, affirming institutional confidence.
Key Financial Information
Conclusion: Is the Patil Automation IPO Worth the Risk?
PAL is an emerging leader in automation solutions, catering to the automotive industry and other industrial needs. The company has demonstrated steady growth in both its revenue and profits during the reported periods. Over 80% of its revenue is generated from repeat orders from OEM customers. PAL aims to exceed expectations as it continues with its ongoing expansion plans. Based on its latest financial data, the company's stock appears to be aggressively priced.
Investors considering participation in the IPO should review the company's financials and the Patil Automation Limited IPO RHP thoroughly to make an informed decision. For more insights and detailed analysis Whatsapp group, and visit www.stockknocks.com
DISCLAIMER
The information provided in this blog is for informational purposes only and should not be construed as investment advice. Readers are encouraged to conduct their own research and consult with financial advisors before making any investment.
Social Media
