| Conversion of Compulsorily Convertible Preference Shares (CCPS) and Optionally Convertible Debentures into equity shares|23/04/11 13:45 | |
| PI Industries Ltd has informed BSE that the Board of Directors of the Company vide Circular resolution dated April 23, 2011, has made allotment of 3,11,658 Equity Shares of Rs. 10/- each at a premium of Rs. 249.90 per equity share to M/s. Standard Chartered Private Equity (Mauritius) Ltd. and M/s. Standard Chartered Private Equity (Mauritius) II Ltd. upon conversion of 8,10,000 compulsorily Convertible Preference Shares (CCPS) of Rs. 100/- each held by them and has also allotted 1,025,030 Equity Shares of Rs. 10/- each at a premium of Rs. 249.90 per equity share to M/s. Standard Chartered investments and Loans (India) Limited upon conversion of 2,664,053 optionally Convertible Debentures of Rs. 100/- each, the details of which are as follows: 1. Allottees: M/s. Standard Chartered Private Equity (Mauritius) Ltd - No. of CCPS (Rs. 100/- each) being converted into equity shares: 405,000 - Equity Shares of Rs. 10/- each allotted post conversion: 155,829 2. Allottees: M/s. Standard Chartered Private Equity (Mauritius) II Ltd - No. of CCPS (Rs. 100/- each) being converted into equity shares: 405,000 - Equity Shares of Rs. 10/- each allotted post conversion: 155,829 - Allottees: M/s. Standard Chartered Investment and Loans (India) Ltd - No. of OCD's (Rs. 100/- each) being converted into equity shares: 2,664,053 - Equity Shares of Rs. 10/- each allotted post conversion: 1,025,030 The total paid up capital of the Company stands at Rs. 12, 52,41,890/- comprising of 1,25,24,189 equity shares of Rs. 10/- each after the above allotment. |
I have been guilty of not looking into PI industries before. I spent a couple of hours today, and found it is certainly worth investigating more.
The business model has some unique advantages. If the claims made by the company bear out, and they execute well, growth possibilities are immense as also possible margin expansion.
To get a first feel (and for inspiration), I recommend going through Q4Results & Conference Call
I was initially put off by the lack of data, a proper website. But a search for Annual Reports led me here:)
http://piind.in/annual_report.html
and the Conference Call link under Press releases
Edelweiss have come out with initial report on PI Industries. But these are for their trading customers.
http://www.edelweiss.in/company/P-I-Industries-Ltd.html
I tried and could locate the Midcap -Sieze the Moment report that first covered PI industries. if anyone has access to the standalone Initiaiting Coverage report, please share the link.
Emkay Global’s take from latest Conference Call
http://www.emkayglobal.com/Uploads/EmkayResearch/EmkayCommunique_20-Apr-11.pdf
PI Industries is not that unknown!
Having looked closely at the company in last few days, I feel that this company has a lot going for it and inspite of the 20% jump after the initial reco by mahesh it still looks like a good buy.
The fy 11 results are a pointer of good things to come for the company. And as donald mentioned the management talk of explosive growth fructifies, this one is in for a big re rating going forward due to the space it is in.
If as reported by the edelweiss people this company could do around 70 per share for fy 12, this could easily reach PE levels of 15-20 once the first couple of quarters show good results.
I took an initial position today in this one at around 720 levels inspite of having missed the bus earlier at around 600 levels.
thanks again to mahesh for bringing this one out.
1 Like
Agree Hitesh that if first two qrtrs. are good, the counter could rerate very fast, but frankly speaking,PI is a company to which you can’t look at qrtrly earnings but have to look at annual earnings…this is because, delivery offtakes in csm business could defer by a qrtr.or two because of time it takes for stabilisation of molecules… since PI has a r&d focussed model and is working on patented molecules, its topline (growth) is secure by the current order-book of around 1350 cr. (csm bus. current topline is hardly 250 cr.) for atleast coming 3 years but the duration of topline is not fixed, atleast on a qrtrly. basis…
Also, the main story of PI is not FY12 but FY13 which still no research house has focussed on…Fy12 growth is anyway going to be on projected lines but Fy13 could see a sharp jump especially in EBITDA which will coincide with commercialisation of new plant which itself will see a sharp jump in topline… hence, the management projection of 40 % growth each year for next two years is quite reasonable and once the scale is achieved in this year ie., FY12 it should command a p/e of atleast 20 ttm basis which itselfcould make the current rate look history…here i have notconsidered any positives that could come out of Sony-R&D centre where nobel-winning scientists are working on…as all must be aware, Dr. Negeishi, who won nobel prize in chemistry in 2010, visited PI in March 2011 as also Sony’s senior Vice President Osamu Kumagai was himself present and jointly inaugurated Sony-PI research centre in Dec.2010 which gives a great credibility to the management of PI as well as company’s R&D capability and such high calibre company to trade at just 13.8 p/e on ttm basis and a forward fy12e p/e of meagre 10.2 is just an aberration which is because of least speculative interest in the stockdueto no concentrated holding of market movers…however, once the scale gets achieved this aberration has to get corrected and we all have to take benefit of this fact only…
Having stated this I must admit here that if anything goes wrong it will be very difficult to sell the stock because of its illiquid nature but with 65 % stake with promoters, 15 % stake with Std.Chtd.PE and 10 % with promoters close associates, 10 % minority shareholders have much less to loose while promoters and pe firm have much more to loose which compels me to have PI Ind.form significant part of my core portfolio with a long term view.
Having stated this I must admit here that if anything goes wrong it will be very difficult to sell the stock because of its illiquid nature but with 65 % stake with promoters, 15 % stake with Std.Chtd.PE and 10 % with promoters close associates, 10 % minority shareholders have much less to loose while promoters and pe firm have much more to loose which compels me to have PI Ind.form significant part of my core portfolio with a long term view.
Views are welcome.
Rgds.
PI Ind. to get listed on NSE tommorrow, 15th June 2011… Management’s promise given in 1st concall post q3fy11 numbers fulfilled.
Rgds.
Latest Annual Report 2011 of PI Industries can be acessed at :
http://www.scribd.com/doc/58807068
Rgds.
Thanks a lot Mahesh.
Key Takeaways from recent FY2011 Annual Report of P. I. Industries Ltd. :
-
Revenue of the company increased by 33 % YoY to Rs. 719 cr. backed by a 38 % rise in Agri-Input business and a 23 % rise in Custom-Synthesis (CSM) business.
-
Operating Profit increased by 41 % YoY to Rs. 123.64 cr. backed by a 105 basis points expansion in OPM. This expansion in margins was achieved inspite of the fact that company’s Polymer business (which is now sold off to Rhodia, S.A.) witnessed significant pressure on margins because of input-cost pressures.
-
Company foresees FY12 to attain similar growth rates with a good expansion in margins backed by new product launches in Agri-Input segment and ~Rs. 1350 cr. order-book of CSM business.
-
In end-FY11, company has started commercial production of some very promising products revenues of which are going to accrue in FY12.
-
Key highlight of FY11 was the signing of an agreement with the largest electronics company of the world, Sony Corporation to set-up a joint research centre in Udaipur, named PI-Sony Research Centre, which was inaugrated in January 2011. As per the agreement, this R&D centre will be engaged in developing commercially viable processes for molecules invented by Sony.
-
In PI-Sony R&D centre, work has already commenced on innovative chemicals meant for use in futuristic products like flexible television and solar cells. This centre is projected to be a potential future growth driver for the company.
-
Company’s flagship brand in Agri-Input segment viz., Nominee Gold has attained a status of the fastest growing herbicide brand of India. In coming years, company expects Nominee Gold to attain a status of the largest herbicide brand in India with respect to Rice crop.
-
In FY11, company has, in association with a leading MNC, successfully introduced a herbicide in soyabean and pulses segment.
-
In FY11, company has filed registration for two new molecules and has signed four new agreements with original patent holders to evaluate the domestic launch of their innovative molecules in herbicide / fungicide segment.
-
Company has signed a distribution agreement with a leading MNC for marketing of its new generation insecticide and acaricide which will help PI further strengthen its dominant position in plantation, field crops, vegetables and fruits.
-
In FY11, company filed Seven patent applications for new non-patent-infringing processes developed for various molecules.
-
Company’s upcoming plant at Jambusar is presently under construction and is expected to get commissioned in last quarter of FY12. This plant, once operational, is expected to contribute heavily towards the growth of the company.
http://www.scribd.com/doc/58807068 Link: http://www.scribd.com/doc/58807068
Rgds.
I went through the AR for fy 11 and found it very informative. As I mentioned earlier, this company has a lot going for it. Currently it is available around the 700 levels because I guess it needs time for consolidation post the sharp run up. Good time for those convinced about the story and willing to accumulate. To me it is a great story unfolding. And by the looks of it not too much market action here. My guess is the stock movement will occur in bursts and these will be followed by prolonged periods of consolidation, mostly sideways.
1 Like
I can access the initiating coverage report (I am registered with edelweiss). If you want the report let me know. I can email a copy. If you are registered you can find the report if you display ‘Equity’ reports for last ‘1 Month’ (this is on 3rd page in the list).
Regards,
Rahul
PS : I am not sure if the link will work.
Recent Edelweiss Research report on PI Industries uploaded to my scribd account alongwith transcript of Q4FY11 concall… Providing links below for reference :
Edelweiss Report on PI – June-2011:
http://www.scribd.com/doc/58945997
Q4FY11 Concall Transcript :
http://www.scribd.com/doc/58945770
Rgds.
Edelweiss estimate for PI INd. Q1FY12
Rev.- 165.5 cr.
EBITDA - 28.1 cr.
PAT - 12.9 cr.
Comments of Edelweiss :
Seasonally subdued quarter due to low sale in agri-input
division. Y-o-Y improvement in margin expected. Sales
proceeds from the polymer business to be realised in the
quarter.
Attaching link to today’s interview of PI Ind. Ceo Mayank Singhalon ETNOW :
1 Like
Central Insecticide Boardhas recently granted registration of Kresoxim Methyl based pesticide to PI Industries while it has reserved the grant of registration for Orysastrobin based pesticide of Pi.
I think the first one is a fungicide for vegetables andcereals and the second one is fungicide for rice.
The first one for which registration is granted, has alarge market of around 2000 cr. worldwide and Rallis’s Ergon, which is based on this ingredient, is its top selling product in India right now with annual sales of >100 cr… Although I feel Rallis must be having an exclusivity period till 2012 and so recent registration might be used in some innovative formulation for export by Pi.
Rgds.
**
PI Industries
**
By Editorial Team â on June 23, 2011
Editorial Team â on June 23, 2011**
An agrochemicals company that provides inputs and solutions to farmers in key areas of crop protection chemicals, specialty products and plant nutrients
**
The company was founded in 1947. The company is headquartered in Udaipur. The company manufactures onsecticides, fungicides, herbicides and plant nutrient.â PI is popular with farmers for its VEGFRU brand products and services. PI is ranked amongst the top Indian agrochemical manufacturers, marketers and exporters.PI exports its products to over 35 countries across Americas, Asia Pacific, Europe, Africa
and Japan,â avers Mr.Dinkar Joshi, DGM, marketing.
The major areas that the company deals in are agri inputs, fine chemicals (CRAMS â Contract Research and Manufacturing Services), polymers and engineering services.While agri-input accounts for over 60% of the companyâs total business,CRAMS forms the rest over 30%. Till December 2010, polymer compounding segment used to form the balance of the total business, which has since been divested.
With a pan-India presence and over 25,000 retail points, PI has a vast distribution network. The company has three formulation and two manufacturing facilities and four multi-product plants under its three business units in Jammu and Gujarat.âOur business is equally distributed among India as we are trusted by all states and all categories of farmers,â maintains Mr. Joshi.
Insecticides
PI produces a range of insecticides which includes phorate, profenofos, ethion, propargite, and thiamethaxam, besides others.âThey all are very cost-effective for all category (small, medium and large) farmers,â maintains Mr. Joshi.
Herbicides
In collaboration with Kumiai Chemical Co Ltd Japan, PI has introduced the new technology of post emergent herbicides (Nominee Gold) for rice crop in India. âThis technology not only saves precious water in transplanted rice but also controls most of the weeds in the direct sown rice, which contributes more than 50% of Indian rice acreages and Indian rice acreages, in the want of such cost saving technical enabler.
This technology promoted by PI jointly with various NGOs, government extension machinery has been accepted as a big human labour cost and water saving technology in the various rain fed rice growing districts of the country. PI is actively working with State Agriculture University, state agriculture departments and NGOs by free distribution of DSR planters for promoting DSR among farmers,â says Mr. Joshi.
The company also provides guidance to the farmers about applying the herbicides, insecticides, and fungicides. âPI Industries is actively working for responsible care to environment and society by promoting safe and judicious use of pesticides. PI has
done nationwide training of trainers, farmers and various other stakeholders on the subject matter. Thousands of safety kits are freely being distributed to the farmers and farm labourers every year to educate them on this aspect,â maintains Mr. Joshi.
Speaking about the reasons behind to the success of PI Mr. Joshi aver, âOur keys to success are:
-
Upholding a reputation for integrity, honesty, straight-forward and just dealings
-
Being committed to the quality of our products
-
Being committed to our customers
-
Being innovative in approach and thought
-
Being open, friendly, sincere and human in behaviour and attitude
-
Contributing to the community as a part of our social responsibility.â
Collaborations
PI has collaboration with other companies locally and internationally for its products. âWe have collaboration with many leading chemical companies in Japan like Sony Corporation, Mitsui Chemicals Agro, Kumiai Chemical Industry Ltd, Nihon Nohyaku; Bayer & BASF in Europe and almost all leading companies in India.â
PI has also opened a research centre in partnership with Sony in Udaipur, PI-Sony Research Centre. The partnership looks to develop synthetic organic chemicals for applications in the electronic industry. While the high technical capabilities of Sony and large chemical manufacturing facilities of PI would help the venture develop the synthetic organic chemical produce in a cost-effective manner, the joint patenting will
benefit PI to improve on its profitability.
R&D
PI has an agro-chemical research and development facility in Rajasthan. Globally, PI offers end-to-end solutions in the fine and specialty chemicals space to the multinationals in Japan, the US and Europe.
âPI is one of the first few companies to have its R&D facilities recognized by Department of Science and Technology, Government of India since 1976, for
pesticides and chemicals. These facilities are also certified by ISO / IEC 17025:1999 for Chemical Testing by NABL (National Accreditation Board for Testing and
Calibration Laboratories, DSIR, Govt of India),â maintains Mr. Joshi.
Economics
Speaking about the economic viability of the products economically for small and marginal farmers Mr. Joshi says, âWe always come up with the products which are
affordable to small farmers; we are manufacturing the granule insecticide which is the most economical solution for many difficult to manage insect pests. At PI, our focus always remains creating value to the Indian farmers through innovative solution.â
Product Features
Mr. Joshi maintains all PI products are safe for the environment. âAll our products are safe and tested by various government labs before commercialization. For more than a decade, PI is promoting a seas weed based product Biovita, which has helped increase the yield and quality of output of the end produce,â says Mr. Joshi.
PI exports its products to over 35 countries across America, Asia Pacific, Europe, Africa and Japan.
Future Growth
Going ahead, the company aims at 40-45% growth from its current businesses in FY12. After selling off its polymer compounding business to France-based chemicals major Rhodia in 2010, the company now focuses on agri-inputs and custom synthesis segments, which together form a major chunk of PIâs revenue. The company has lined up a capex of Rs 125 crore for the next two years to boost capacity and inorganic
growth.
PIâs CSR Activities
The company has been involved in various corporate social responsibility(CSR). PI adopted Dungarpur, a tribal district in Rajasthan in order to develop the tribal
community. Under the agriculture extension programme of CII, Dungarpur, PI focuses on capacity building for increasing crop production and supporting in seed production technology (covering wheat, Barley and Gram crops).
âPI is motivating the farmers to adopt improved technology through weather insurance support. With the support of Rajasthan State Seed Corporation (RSSC) we had arranged distribution of wheat and gram foundation seed on 50% price to farmers for seed production at their farm.
Under self-seed production programme farmers got trained for seed production technology with special focus on nutrient management for quality seed production by 45 training camps under the banner of PI Industries,â says Mr. Joshi. NEFORD (Nand Educational Foundation for Rural Development) is a not-for-profit organization committed to transforming the quality of life for the rural poor and under privileged in the Eastern part of Uttar Pradesh.
Under the NEFORD Agriculture Development Program, PI is working with the organization for the dissemination of appropriate technologies in rice cultivation. PI is imparting free of cost training to the extension workers of the NEFORD, supporting the farmers fairs and helping grow Direct Seeded Rice more profitably.
Mr. Joshi is an agriculture graduate. âThis industry gives me opportunity to interact with farmers of all directions in India and empathize with them as they contribute to more than 60% of Indian population,â he adds.
1 Like
Board Meet next week on 26th July to announce Q1 numbers.
Rgds.