ATC Energies System hit 5% lower circuit after a weak debut on NSE SME; check details

ATC Energies System IPO made a lacklustre trading debut today, April 2, with the stock listing lower compared to its issue price. ATC Energies System stock opened the session at ₹107 apiece on the NSE SME platform against its initial public offering (IPO) price of ₹118 per share.

Within minutes of the opening of the session, the share price dropped as much as 5% to hit the lower circuit limit of ₹101.6 apiece. As many as 3.74 lakh shares of the company changed hands on the bourse soon after listing, leading to a total turnover value of ₹4 crore. The market capitalisation of ATC Energies System stood at ₹207.25 crore.

The ₹63.76-crore NSE SME IPO of ATC Energies System was open for bidding from March 25 to March 27. The issue was subscribed just around 1.61 times during the three-day window, with bids received for over 67.8 lakh shares against 42.09 lakh shares on offer.

The ATC Energies System IPO was a combination of a fresh issue and an offer for sale. The company had fixed the price of shares at ₹118 apiece, while the lot size was kept at 1,200.

ATC Energies System Financials

For the first six months of FY25, ATC Energies System reported a revenue of ₹22.57 crore and a profit after tax (PAT) of ₹5.77 crore. For the financial year 2023-24, the company reported a revenue of ₹51.51 crore compared to ₹33.22 crore in FY 2022-23. Its net profit jumped to ₹10.89 crore in FY24 against ₹7.76 crore in FY23.

ATC Energies System IPO: Use of proceeds

ATC Energies System proposes to utilise the net proceeds from the IPO mainly towards the repayment of loans and funding the company’s expansion plans.

In its red herring prospectus (RHP) submitted to the Securities and Exchange Board of India (Sebi), the company said that it plans to use nearly ₹9.5 crore of the IPO proceeds for repayment and/or pre-payment, in full, of the borrowing availed by the company for purchase of the Noida factory. It also proposed to use ₹6.7 crore for funding the capital expenditure requirements towards refurbishment, civil, and upgradation works at the Noida factory.

Another ₹7.5 crore would be earmarked for funding the capital expenditure requirement towards IT upgradation at the Noida factory, Vasai factory and the registered office. Meanwhile, as much as ₹9.5 crore would be used to fund the working capital requirements of the company, while the remaining amount would be used for general corporate purposes.