Table of content
Innomet Advanced Materials Introduction
Innomet Advanced Materials Ltd, originally established as M/s Padmasree Enterprises in 1984, transitioned into a private limited company in 2019. The company specializes in the manufacturing and global supply of metal powders and tungsten heavy alloys (THA)
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Brief about Innomet Advanced Materials
Summary of the business of Innomet Advanced Materials
Company is engaged in the business of manufacture of Diamond Tools, Metal Powders (Ferrous, Non-Ferrous and their Alloys) and Tungsten Heavy Alloys (THA).
Innomet Advanced Materials History
Company was originally formed as a partnership firm under the name and style of “M/s. Padmasree Enterprises” pursuant to a deed of partnership dated March 07, 1984, as amended from time to time. M/s. Padmasree Enterprises was thereafter converted into a private limited Company “Innomet Advanced Materials Private Limited” pursuant to the provisions of Chapter XXI of the Companies Act, 2013 on January 29, 2019 and fresh a certificate of incorporation dated April 24, 2019 was issued by Registrar of Companies, Central Registration Centre. Subsequently, the name of our Company was changed to Innomet Advanced Materials Limited upon conversion to a public limited company pursuant to a Board resolution dated September 07, 2023 and a resolution passed in the extra-ordinary general meeting of the shareholders held on September 18, 2023 and consequently a Fresh Certificate of Incorporation dated November 9, 2023 was issued by the Registrar of Companies, Hyderabad. The Corporate Identification Number of our Company is U27101TG2019PLC132262.
Innomet Advanced Materials Promoters & Board of Directors
- Mrs. Lakshmi Kanthamma Chilakapati and Mrs. Saritha Devi Chilakapati are the Promoters of Innomet Advanced Materials Company.
Innomet Advanced Materials Board of directors
| Name | Designation |
| Chilakapati Lakshmi Kanthamma | Director |
| Saritha Devi Chilakapati | Whole Time Director |
| Vinay Choudary Chilakapati | Managing Director |
| Ramakrishna Rao Poda | Non-Executive Independent Director |
| Venkata Bhaskara Rao Chadalavada | Non-Executive Independent Director |
| Abhiram Kolli | Non-Executive Independent Director |
Innomet Advanced Materials Share Holding pattern
| Name of the Shareholders | % of Holding |
| Promoters | |
| Lakshmi Kanthamma Chilakapati | 42.09% |
| Saritha Devi Chilakapati | 42.65% |
| Sub-Total (A) | 84.74% |
| Promoter Group | |
| Vinay Choudary Chilakapati | 5.53% |
| Public | 9.72% |
Innomet Advanced Materials Strength
- Experienced Management team having knowledge to scale up and expand into new opportunities;
- Dedicated technical & functional team to provide solutions to our customers;
- Experience of handling large & complex projects;
- Multi-year relationships with most customers;
- Improving operational efficiency.
Innomet Advanced Materials Strategies
- Focus on consistently meeting quality standards
- Deepen and expand our geographical presence
- Strengthening up our business through effective branding, promotional and digital activities
- Maintaining cordial relationship with our Suppliers, Customer and employees
Industry Outlook
GLOBAL POWDER METALLURGY MARKET
OVERVIEW
The global powder metallurgy market size was valued at USD 2.41 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 12.9% from 2023 to 2030. The increasing adoption of additive manufacturing to reduce the weight of parts or components used in the aerospace, defense, and healthcare sectors will drive the market over the forecast period.
3D printing, also called additive manufacturing, offers properties, such as reduced weight, cost- effectiveness, and complexity in designs, which have attracted various manufacturers to implement the technology in their manufacturing processes. 3D printing is used in various industries, such as jewelry, medical, food, footwear, and aerospace. This has positively influenced the market growth.
MATERIAL INSIGHTS
The steel segment held the largest revenue share of over 46.0% in 2022. Steel is considered one of the cheapest materials in additive manufacturing, which can also be utilized in a mixture with other metals, such as bronze, titanium, and aluminum. The low cost and easy availability of steel are expected to increase its utilization in the printing of large products, including machines, car frames, and transport equipment over the coming years. Other applications of steel include spare parts and fully functional components.
The newly emerging applications of steel powder from aerospace, construction, mechanical engineering, and various other industries are further expected to augment its demand.
The other materials segment includes metals such as iron, copper, zinc, molybdenum, tungsten, magnesium, and chromium. The utilization of these metals in the manufacturing, chemical, oil & gas, general, and other industries is projected to create a positive impact on the market. For instance, copper and copper-based alloy powders have excellent electric conductive properties, which makes them applicable in various electrical & electronic applications.
END USE INSIGHTS
Based on end-use, the market is segmented into Original Equipment Manufacturers (OEMs) and AM operators. Large OEMs, especially in the aerospace industry, are investing in metal 3D printing to manufacture aeronautical parts, which offer advantages such as reduced turnaround time, reduction in error, innovation, improved security, improved productivity, cost savings, and enhanced design standards.
AM operators include online and offline 3D printing service providers. Online 3D printing services are gaining prominence as they help streamline the ordering process through online platforms, thereby reducing the overall production time substantially, which drives the market growth.
APPLICATION INSIGHTS
The aerospace & defense application segment accounted for the largest revenue share of more than 51.0% in 2022. The ability of the aerospace & defense industry to bear high initial costs and its adaptable nature to new technologies are anticipated to propel the segment growth. An innovative aerospace approach aided by the demand for complex geometric structures is expected to drive the use of various technologies in the market, thereby boosting the market growth.
Increasing industrial output and energy requirements are the key driving factors for segment growth. In the oil & gas industry, the demand for metal-based products manufactured using additive manufacturing has shown significant growth. For example, burners for gas turbines, pumps, turbomachinery, valves, gas turbine nozzles, and other applications.
REGIONAL INSIGHTS
In terms of revenue, North America accounted for the highest share of more than 34.0% in 2022, owing to the high demand from the aerospace & defense industry. The presence of major government and private aerospace companies coupled with high defense expenditure in the U.S. is expected to propel the market growth over the forecast period.
Asia Pacific is estimated to register the fastest CAGR over the forecast period. Factors such as high population levels and increasing consumer disposable income have led to the adoption of additive manufacturing in the automotive and healthcare industry. The promotion of private investments by various governments is projected to boost the manufacturing sector in the region, which, in turn, is expected to propel the demand for powder metallurgy.
MARKET DRIVERS
The automotive industry is one of the primary drivers of the powder metallurgy market. Globally over 80% of powder metallurgy applications are in the automotive industry. Powder metallurgy is widely used in automotive components such as engine parts, transmission systems, gears, bearings, and structural parts. The demand for lightweight & fuel-efficient vehicles has led to increased adoption of powder metallurgy, as it offers cost-effective manufacturing, design flexibility & improved performance. The exponential growth of the EV market is a significant driver for the powder metallurgy industry. EVs require lightweight, high-performance components to enhance battery efficiency and vehicle performance. Powder metallurgy techniques, such as sintering and metal injection moulding, enable the production of complex shapes and lightweight parts with excellent mechanical properties, making them ideal for EV applications.
Sustainability is a driving factor in the powder metallurgy market, as it offers environmental benefits, resource efficiency, lightweight capabilities, design flexibility & consumer demand. This industry generates less waste, requires lower energy consumption, and emits fewer greenhouse gases than conventional methods. It also enables using recycled powders, reducing the need for mining and extraction, and shapes complex geometries with minimal material waste. Powder metallurgy also offers lightweight, reducing the overall weight of products and enhancing energy efficiency and emissions. Design flexibility & innovation are also driven by sustainability, enabling the development of lightweight, energy-efficient & environmentally friendly products. The growing demand for sustainable solutions in sectors like automotive, aerospace, energy, and consumer goods makes powder metallurgy an attractive choice for manufacturers. Governments worldwide are implementing regulations to promote sustainability and reduce the environmental impact of industries, creating a supportive environment for sustainable manufacturing processes like powder metallurgy.
OPPORTUNITIES
Powder metallurgy incorporates a plethora of procedures with special designed metal powders in order to fulfil the continuously rising demand of a variety of drivetrain applications especially Powertrain. The powdered metal/PM procedure chain permits an energy efficient production of the powertrain components and hence leads to a green (environment friendly) production process. Thus, PM/powder metal powertrain components is regarded as a highly efficient price saving factor. This, in turn will cater to extensive opportunities for market progression in future. As per SMR, majority of the cars that were manufactured in USA had gasoline powertrain. In 2021, approximately 86.1% of the cars
produced in the U.S. consisted of a gasoline powertrain, around 3% of EV powertrain, & almost 9% gasoline-hybrid powertrain respectively.
PM with exceptionally good characteristics can be used to create both soft and hard magnets. The most prevalent types of magnets made of PM are NdFeB superhard magnets and soft magnetic composites (SMCs) such as the production of Sintered Soft Magnetic parts. Additionally, due to demographic factors, the demand of MIM (metal injection moulding) is expanding, especially in the medical sector, which is a rapidly expanding the industry. Hence, it can be said that PM is moving forward with an exponential growth rate which, in turn, will cater to extensive opportunities for growth in future.
Based on Type, the ferrous type segment dominated the overall market with a share of 80 percent in 2020. As per Metal Powder Industries Federation, the automotive industry consumes over 70% of the ferrous powder metallurgy components. More than 350 automotive component applications are available, creating over 1,000 specific pieces for sale. This is due to the increase in utilization in the production of machines, car frames, and transport driving the segment’s overall growth.
Based on the manufacturing process, the powder metallurgy market is categorized into additive manufacturing, Power metal hot isostatic pressing & metal injection moulding. The PM HIP manufacturing process dominates the powder metallurgy market with a market share of 55%, poised to reach $4.23 billion by 2030. It combines the benefits of powder metallurgy and hot isostatic pressing to produce high-quality, fully dense metal components. The process involves several key steps, including powder production, blending and compacting, sintering, and hot isostatic pressing. The PM HIP process has several advantages, including enhanced mechanical properties, complex geometries, material diversity, cost-effectiveness, consistency, reproducibility, and improved material utilization. It is suitable for various industries, such as automotive, aerospace, medical & energy, and can be used for different metals & alloys. The process also allows for using recycled materials, reducing waste, and improving sustainability.
Based on Applications, the automotive segment dominated the market with a CAGR of 3.8 percent in 2020. This is because they can filter gases and liquids and create mechanical parts with a variety of compositions, such as metal-metal and metal-non-metal combinations, due to their regulated porosity and self-lubricating capabilities. It also enables the fabrication of automobile parts with extremely minimal scrap and material waste, excellent dimensional accuracy, and consistency in attributes and dimensions. Automobile parts are made of a variety of metals, including non-ferrous and ferrous metals. According to the OICA, worldwide car manufacturing increased by 3% from 2020 to 80.154 million vehicles in 2021. This should accelerate the market growth.
Based on Regions, The Asia-Pacific accounted for the largest market share with a steady CAGR in 2020. The highest percentage of the Asia-Pacific region can primarily be attributed to high population levels, private investments by various governments, and increasing consumer disposable income that led to the widespread adoption of additive manufacturing in the automotive and healthcare industry. According to JEITA, the net production value of the electronics industry in Japan was around JPY 10.95 trillion in 2021, which is 110% of the production value compared to the last year. The electronics exports in 2021 amounted to JPY 10.82 trillion, with JPY 1.04 trillion in December 2021. Additionally, the Chinese Aviation Industry Development Research Centre reported that China had boosted its 2021 defence budget by 6.8% to 1.35 trillion yuan (USD 209 billion), growing at a faster rate than it did in 2018. Also, by 2025, China’s aircraft strength will reach around 5,343. The (+ve) economic growth trends in countries such as Japan, China, and India, have boosted the need for powder metallurgy products and applications.
ANALYSIS:
The Powder Metallurgy Market size is estimated at USD 20.76 billion in 2024, and is expected to reach USD 26.10 billion by 2029, growing at a CAGR of 4.68% during the forecast period (2024- 2029).
In 2020, COVID-19 negatively impacted the market. However, the market has now been estimated to have reached pre-pandemic levels and is expected to grow steadily in the future.
- Powder metallurgy is being used more and more by automotive OEMs, which is one of the main things driving the market.
- On the other hand, rising costs of raw materials and tools are likely to slow the market’s growth.
- In the coming years, market opportunities are also expected to come from the growing use of P/M techniques in the medical field.
- The Asia-Pacific region led the market for powder metallurgy, and it is expected to have the highest growth rate over the next few years.
- Asia-Pacific has become one of the most important powder metallurgy markets and a top destination for manufacturers because its economy is growing and people have more money to spend.
- The positive economic growth trends in countries such as China, India, and Japan have boosted the demand for powder metallurgy products and applications in recent years.
- Source: https://www.mordorintelligence.com/industry-reports/powder-metallurgy-marke
POWDER METALLURGY INDUSTRY SEGMENTATION
- Powder metallurgy is a way to make things that uses less energy and has better performance and more design options than traditional methods like casting, forging, extrusion, stamping, and machining. The powder metallurgy market is segmented by product type, application, and geography. By product type, the market is segmented into ferrous and non-ferrous metals. By application, the market is segmented into automotive, industrial machinery, electrical and electronics, aerospace, and other applications. The report also covers the market size and forecasts in 15 countries across major regions. For each segment, market sizing and forecasts have been done based on revenue (USD million).
Innomet Advanced Materials Business Data
Innomet Advanced Materials Verticals
- Innomet Powders.
- Innotung.
Innomet Advanced Materials Peer companies comparison
- No listed peer companies
Innomet Advanced Materials SWOT ANALYSIS
- Strengths
- Diverse Product Range: Innomet offers a wide variety of metal powders and tungsten heavy alloys, catering to multiple industries such as defense, aerospace, and surface coatings.
- Established Market Presence: With a history dating back to 1984, the company has built a strong reputation and customer base.
- Technological Expertise: Advanced manufacturing techniques and a focus on innovation help maintain high product quality and performance.
- Experienced Leadership: The company is led by promoters with extensive experience in general engineering and metal/alloy powders.
- Weaknesses
- Limited Scale: As an SME, Innomet may face challenges in scaling operations compared to larger competitors.
- Financial Constraints: Limited financial resources could restrict the company’s ability to invest in new technologies or expand its market reach.
- Dependence on Key Markets: Heavy reliance on specific industries like defense and aerospace could pose risks if these sectors experience downturns.
- Opportunities
- Market Expansion: Growing demand for advanced materials in emerging markets presents opportunities for expansion.
- Technological Advancements: Investing in new technologies and R&D can lead to the development of innovative products and solutions.
- Strategic Partnerships: Collaborations with larger firms or research institutions could enhance capabilities and market reach.
- IPO Proceeds: The recent IPO can provide the necessary capital to fund expansion and technological upgrades.
- Threats
- Economic Fluctuations: Economic downturns can impact demand for the company’s products, especially in key sectors.
- Intense Competition: The advanced materials market is highly competitive, with numerous players vying for market share.
- Regulatory Changes: Changes in industry regulations or trade policies could affect operations and profitability.
- Supply Chain Disruptions: Dependence on raw material suppliers could pose risks if there are disruptions in the supply chain.
Innomet Advanced Materials Business risk factors
Innomet Advanced Materials Financials
Innomet Advanced Materials Key Financial Ratios
| Particulars | 30 -September- 2023 | 31-Mar- 2023 |
| Current Ratio | 1.49 | 1.71 |
| Return on Equity Ratio (%) | 21.37% | 111.53% |
| Debt- Equity Ratio | 1.273 | 4.195 |
| Debt Service Coverage Ratio | 22.53% | 47.50% |
| Trade Receivables turnover ratio | 7.329 | 17.435 |
| Trade payables turnover ratio | 4.438 | 8.018 |
| Inventory Turnover Ratio | 1.709 | 3.213 |
| Net capital turnover ratio | 1.69 | 3.44 |
| Net profit ratio (%) | 13.28 | 11.85 |
| Return on Investment | 21.37% | 111.53% |
| EPS | 2 | 2 |
Innomet Advanced Materials Key Performance Indicators
(₹ in lakhs, except Ratio)
| Particulars | Six Months ended September 30, 2023 | 2023 | 2022 | 2021 |
| Revenue from | 1531.31 | 2712.93 | 2238.42 | 1243.78 |
| Total Income | 1588.84 | 2714.78 | 2240.35 | 1252.31 |
| Operating EBITDA | 272.97 | 574.49 | 171.57 | 121.27 |
| Operating EBITDA Margin (%) | 17.18% | 21.16% | 7.66% | 9.68% |
| Profit/(loss) after tax for the year/ period | 203.35 | 321.55 | 55.17 | 20.12 |
| Net profit Ratio/ Margin (%) | 13.28% | 11.85% | 2.46% | 1.61% |
| Return on Equity (ROE) (%) | 21.37% | 111.53% | 19.13% | 10.68% |
| Debt To Equity Ratio | 1.273 | 4.195 | 3.4 | 4.18 |
| Interest Coverage Ratio | 5.93 | 6.07 | 2.03 | 1.69 |
| ROCE (%) | 11.12% | 27.70% | 10.23% | 8.98% |
| Current Ratio | 1.49 | 1.71 | 1.48 | 1.43 |
| Net Capital Turnover Ratio | 1.075 | 3.84 | 5.89 | 5.39 |
Innomet Advanced Materials Assets & Liabilities
(₹ in lakhs)
| Particular | September, 2023 | March, 2023 | March, 2022 | March, 2021 |
| EQUITY AND LIABILITIES | ||||
| Shareholder’s Fund | 1423.45 | 705.94 | 379.78 | 230.59 |
| Non-current liabilities | 713.91 | 839.64 | 550.14 | 403.18 |
| Current liabilities | 912.78 | 711.61 | 618.48 | 607.2 |
| Total | 3050.14 | 2257.19 | 1588.95 | 1240.97 |
| ASSETS | ||||
| Non-current assets | 1691.35 | 1043.51 | 614.94 | 375.67 |
| Current assets | 1358.79 | 1213.69 | 974.01 | 865.3 |
| Total | 3050.14 | 2257.19 | 1588.95 | 1240.97 |
Innomet Advanced Materials Profit & Loss
(₹ in lakhs, except %)
| Particulars | Six Months ended September 30, 2023 | 2023 | 2022 | 2021 |
| Revenue from | 1531.31 | 2712.93 | 2238.42 | 1243.78 |
| Total Income | 1588.84 | 2714.78 | 2240.35 | 1252.31 |
| Operating EBITDA | 272.97 | 574.49 | 171.57 | 121.27 |
| Operating EBITDA Margin (%) | 17.18% | 21.16% | 7.66% | 9.68% |
| Profit/(loss) after tax for the year/ period | 203.35 | 321.55 | 55.17 | 20.12 |
Innomet Advanced Materials Cash Flow
(₹ in lakhs)
| Particulars | September30, 2023 | March 31,2023 | March 31,2022 | March 31,2021 |
| Net cash used/ generated from operating activities | 164.26 | 352.99 | -17.79 | -12.58 |
| Net cash used/ generated from investing activities | 671.43 | -472.44 | -271.54 | -68.83 |
| Net cash used/ generated from financing activities | 516.00 | 118.15 | 288.13 | 79.67 |
| Net increase/ (decrease) in cash and cash equivalent | 8.83 | -1.30 | -1.21 | -1.74 |
Innomet Advanced Materials Capital structure
(₹ in lakhs, except Ratio)
| Particulars | September 30, 2023 |
| Borrowing | |
| Short – Term Debt | 497.45 |
| Long – Term Debt | 713.91 |
| Total Debt | 1211.36 |
| Shareholders’ Funds | |
| Equity | 951.65 |
| Reserves & Surplus Including Premium | 471.80 |
| Total Shareholders’ Funds | 1423.45 |
| Long – Term Debt / Shareholders Fund | 0.502 |
| Short – Term Debt / Shareholders Fund | 0.3495 |
IPO Details
Innomet Advanced Materials IPO Details
| Feature | Details |
|---|---|
| IPO Type | SME IPO |
| Issue Size | ₹34.24 crore |
| Price Band | ₹100 per share |
| Face Value | ₹10 per share |
| Minimum Order Quantity | 1200 shares |
| Open Date | September 11, 2024 |
| Close Date | September 13, 2024 |
| Listing Date | September 18, 2024 (NSE SME) |
Innomet Advanced Materials Object of the issue
(₹ in lakhs)
| Particulars | Amount |
| Working capital requirement | 1159.70 |
| Capital expenditure requirements of our Company towards purchase of machinery and equipment | 684.36 |
| Repayment or prepayment, in full or in part, of all or a Portion of certain outstanding borrowings availed by our Company, from banks and financial institutions | 251.95 |
Litigation involved in Innomet Advanced Materials
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