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Jayanta Mallick

Co betting on recent acquisitions

Kolkata June 13 EPIC Energy Ltd stock has literally been on a roll in the last one month and has posted a gain of 21.57 per cent on the BSE. It created its 52-week high on June 6 at Rs 113.95. Today, it had a high of Rs 110, but closed at Rs 109.35, recording an overnight gain of 1.39 per cent.

While promoter and promoters' group hold 25.15 per cent in the company, 74.85 per cent equity is with public. Interestingly, individual shareholders holding share capital in excess of Rs 1 lakh is at 42.94 per cent while institutional holding is none.

The BSE-listed stock witnesses trading volume in the range of a few thousands only.

The company, a player in electrical energy management space, has acquired SRS Engineers (SRS), a boutique power electronics and energy conservation firm headquartered in Coimbatore in an all cash deal.

Mr Nikhil Morsawala, Director of the company, told Business Line that this acquisition cost Epic (2006-07 turnover Rs 2.38 crore) Rs 1.25 crore. Incidentally, the Mumbai-headquartered Epic, has in the last 6 months have bought out a total of 3 small local players in this niche segment at a total cost of Rs 2.20 crore. These acquisitions have not only improved prospects for a turnover scale-up, but also lent footprints in three different States.

SRS is a manufacturer of street light (automatic switch — timer-based) controllers and other voltage-control devices and power saving switches with presence in towns such as Coimbatore, Cuddalore, Erode, Karur, Ramanathapuram, Nagapattinam, Pudukkottai, Thanjavur, Thiruvallur, Virudhunagar and Theni.

Since the market for Eipc's products and services are currently restricted to civic bodies, local level operators would provide additional functional and marketing edge, analysts feel. It is now looking to extend its market to bulk power users such as hospitals, hotels, malls, commercial establishments, industrial parks and SEZs.

Incidentally, last fortnight the Centre's release of the Energy Conservation Building Code, which is meant to be voluntary for a year and compulsory from the second year, may open up a world of new market for the company.

PEs show interest

Mr Morsawala confirmed that a couple of overseas PE firms have shown interest in its ramp up exercise. "We would like to wait a while to before we take any fresh investment on board". So far the company (with a paid-up capital of Rs 6.71 crore) has funded the acquisitions from its own resources.

During 2006-07 its EPS jumped to Rs 2.76 from Rs 0.34 in 2005-06. On March 31, 2007, the company allotted 29,00,000 shares on the exercise of the warrants issued in October, 2005, at a premium of Rs 8 for Rs 10 shares each to 5 HNIs.

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