Two BSE SME IPOs this week
Shiva Granito Export Ltd (SGEL) that started as importer and exporter of all kind of decorative stones, minerals, chemicals has now entered into manufacturing of the engineered quartz stone slabs, different grades of resins and quartz stone powder and manufacture & dealing of God & Goddess Statues/deities. The company‘s manufacturing unit is equipped with laboratory, enabling the company in-house to develop new colours, besides facilitating conducting of tests and analysis of various products. At present it has manufacturing plant for engineered quartz stone slabs, different grade of resins, quartz powder and god & goddess statues/ deities. It has also installed a resin manufacturing unit with the annual capacity of around 1900 MT of different grades like PET, General Purpose and Marble Grade etc. and a Quartz Slab Manufacturing Unit of annual capacity around 1.5 million sq. ft. for manufacturing quartz slab of different colours and sizes.
To meet its working capital requirements and raise general corpus fund, the company is coming out with a maiden IPO of 4200000 equity share of Rs. 10 each at a fixed price of Rs. 12 per share to mobilize Rs. 5.04 crore. Issue opens for subscription on 23.08.16 and will close on 29.08.16. Minimum application is to be made for 10000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely managed by Pantomath Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue.
On performance front, the company has posted turnover and net profits of Rs. Rs. 2.58 cr. / (Rs. 0.18 cr.) (FY 14), Rs. 14.59 cr. / (Rs. 0.85 cr.) (FY 15) and Rs. 16.62 cr. / (Rs. 1.17 cr.) (FY 16). For the fiscal ended 31.03.16 the company’s accounts are on a broken periods for 31.12.15 and 31.3.16 because of its status as partnership firm till 31.12.15. Thus the company has been incurring losses for all these years.
On merchant banker’s front, this is the 22nd mandate from its stable and out of 21 IPOs handled before this has shown mixed trends.
Conclusion: Promoters have taken major chunk at the same price expressing their confidence for future prospects. Current performance does not match the asking price. However, cash surplus risk savvy investors may consider it for long term investment; other may give it a miss.
Mitsu Chem Plast Ltd (MCPL) is an ISO 9001:2008 and ISO TS/16494 (Unit – III) certified polymer based molded products manufacturing company, engaged in the business of manufacturing and marketing of technically driven innovative products catering to growing industry segments like, Industrial Packaging Solutions, Lifestyle Products, Automotive Components, Healthcare Products, Infrastructure related products & Emergency Handling Solutions. MCPL’s products are manufactured under brand “Mitsu” and the same are sold to various intermediary companies who, after minor value additions and / or modifications supply to various Automobile companies.
For listing of its shares on BSE SME platform, the company is coming out with a maiden offer for sale of 1000800 equity shares of Rs. 10 each at a fixed price of Rs. 95 per share to mobilize Rs. 9.51 crore. Issue opens for subscription on 26.08.16 and will close on 31.08.16. Minimum application is to be made for 1200 shares and in multiples thereon, thereafter. The Offer will constitute 28.39% of the post-Offer paidup Equity Share capital of the Company. The cost of acquisition of shares by the promoters is Rs. 2.46 per share. Issue is solely managed by Aryaman Financial Services Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. It raised equity at par most of the time except few shares issued at a price of Rs. 50 per share in February 2008 (based on Rs. 10 paid up value). It has also issued bonus shares in the ratio of 2 for 1 in November 2006 and 3 for 2 in June 2016. Being offer for sale, no fund is coming to company and paid up equity remains same at Rs. 3.53 crore. In the past three (3) years its turnover /net profits were Rs. 70.73 cr. / Rs. 1.63 cr. (FY 14), Rs. 88.24 cr. / Rs. 0.76 cr. (FY 15) and Rs. 89.24 cr. / Rs. 1.91 cr. (FY16). If we attribute the latest earnings on the latest paid up capital then asking price is at a P/E of 17 plus against industry average of 22. Thus this IPO appears to have been priced reasonably. On merchant banker’s front, this is the 11th IPO from its stable and earlier IPOs have shown mixed trends.
Conclusion: Investors may consider investment for long term.
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. As SME issues have entry barriers and low preference from broking community, any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on information available as on date coupled with market perceptions. Author has no plans to invest in this offer. (SEBI registered Research Analyst-Mumbai). (Email: dilip_davda@rediffmail.com)