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13. VALUE INVESTOR  Apr 10, 2017 12:04:22 PM IST Reply

Shankara Building Products Ltd IPO

Stunning rally in Shankara from 630 to 760 in 2 days !!!!
13.1. Khemka  Apr 10, 2017 12:17:23 PM IST

Shankara Building Products Ltd IPO

Sebi should put it in trade to trade group alongwith dmart with immediate effect.
12. VALUE INVESTOR  Apr 5, 2017 10:16:03 AM IST Reply

Shankara Building Products Ltd IPO

Looks like it is heading in only one direction that is UP....UP
11. VALUE INVESTOR  Apr 5, 2017 10:13:06 AM IST Reply

Shankara Building Products Ltd IPO

Sold 22@572, holding 10 for long term.
10. VALUE INVESTOR  Apr 5, 2017 9:29:09 AM IST Reply

Shankara Building Products Ltd IPO

actual price will become clear only at 9:45 AM
9. VALUE INVESTOR  Mar 31, 2017 5:45:04 PM IST Reply

Shankara Building Products Ltd IPO

Got 1 out of 4 after long long time.......since QUESS......that too with karvy.
8. VALUE INVESTOR  Mar 23, 2017 9:13:00 AM IST Reply

Shankara Building Products Ltd IPO

Analysis of upcoming IPO of Shankara Building Products has been loaded on You can access it in the Free Zone in the IPO Analysis section. The section can be accessed at:

IPO Analysis: Shankara Building Products

Verdict: Building a sturdy product

Shankara Building Products is entering the primary market on Wednesday, 22nd March 2017 to raise Rs. 45 crore via a fresh issue of equity shares accompanied by an offer for sale (OFS) of upto 65 lakh equity shares of Rs. 10 each, by promoter and Fairwinds (formerly Reliance PE), both in the price band of Rs.440 to Rs.460 per share. Representing approximately 33% of the post issue paid-up share capital, issue will raise Rs. 345 crore at the upper end, of which OFS portion is the majority, worth Rs.300 crore. Issue closes on Friday 24th March and is likely to list on 4th April.

Shankara Building Products, a first generation entrepreneurial venture started in 1995 by IIM-A alumnus Sukumar Srinivas, retails home improvement and building products (such as cement, TMT bars, pipes, tubes, solar heaters, tiles, sanitary ware, kitchen sinks, plywood, lighting, paints etc.) through 103 ‘Shankara Buildpro’ stores, located in South and West India, primarily Karnataka, Telangana and Andhra, aggregating 3.9 lakh sq ft of retail area. Besides retail (which accounts for 42% of current topline, up from 22% in FY13), enterprise and channel sales (through 1,924 dealers) make up for 33% and 25% of sales, respectively.

Company is an integrated player having 3.23 lakh MTPA processing facilities (operating at 94% utilization levels), 56 warehouses (6 lakh sq. ft.) and 44 owned trucks for last mile delivery. In addition to third party brands, company offers a bouquet of own brands for steel pipes, colour coated roofing sheets, bright rods, galvanized and cold rolled strips, under CenturyRoof, Ganga, Loha, Taurus, Prince Galva, which bring in nearly 50% of the sales currently, thus aiding margins. It same store sales growth (SSSG) of 24% in FY15 and 29% in FY16 were healthy.

From FY12 to 9MFY17, company’s cost of materials has contracted from 90.4% of revenue to 86.1% of revenue, which has in-turn expanded EBITDA margin from 5.0% to 6.4%. Due to tight control on costs (employee and other operating costs) at sub-8% of turnover, company has been able to grow margin steadily (albeit being thin), as share of retail pie enlarges. It aims to increase retail share to 65-70% over the next few years.

Although FY16 revenue, at Rs. 2037 crore, was up only 3% YoY, EBITDA grew 33% YoY to Rs. 120 crore, as share of retail in total sales increased from 31% in FY15 to 40% in FY16. Net profit grew at a faster pace, up 83% YoY at Rs. 41 crore, as against Rs. 23 crore in FY15. Profitability for first nine months of FY17 continues to strengthen, as EPS of Rs.19 outpaced FY17’s EPS of Rs. 18.90. Net margin during 9MFY17 strengthened to 2.4% (net profit Rs. 42 crore) versus FY16’s 2.0% and FY15’s 1.1%.

As of 31-12-16, company’s equity is small at Rs. 21.87 crore while networth was Rs. 332 crore. Promoter holding is 62.45% which will contract to 56.20% post IPO, while Fairwinds PE’s stake will decline to 7.18%, from 33.59% currently. Company’s total debt stands at Rs. 280 crore, most of which is short-term, for working capital. Fresh issue proceeds of Rs. 34 crore will be used for debt reduction, taking debt below Rs. 250 crore, which will in-turn lower debt equity ratio to 0.65:1, keeping it within comfortable limits.

Due to acquisitions in FY10 and FY13, company’s return on equity dwindled (to as low as 8.9% and 12.3%), as earnings did not keep pace, coupled with capital getting blocked. However, things seem to be normalizing for the company, with 9MFY17 annualised return on equity inching towards 17% pa mark.

At the upper end of the price band, company’s market cap will be close to Rs. 1,050 crore and EV about Rs. 1,300 crore, which discounts annualized 9MFY17 earnings by EV/EBITDA and PE multiples of 18x and 9x respectively and by 16x and 8x, based on FY18 estimates, which is not very aggressive. Company has a unique business model, with no direct peers in the listed space. If compared with listed retailers, they are currently trading at EV/EBITDA and PE multiples of 20x+ and 35x+ respectively, while tube and pipes makers (APL Apollo Tubes, Ratnamani Metals) are ruling at PE multiples above 20x, so are cement players. However, these are only very broad-based comparisons, but still help narrow down comparisons.

Government’s thrust on Housing for All by 2022 and sops towards it will provide the much needed boost to the sector. Besides, many biggies are attracted by the sector prospects, take for instance paint leader Asian Paints increasing its presence in home improvements space through the inorganic route and scouting for more opportunities. Thus, macros hold promise.

Shankara is an interesting play, due to its first-mover advantage, negligible competition in the organized space, low cost structure, well capitalized balance sheet and increasing retail revenue pie. For future growth, it does not require further equity dilution and has added stores at a healthy pace (15% CAGR since FY14), which will mature going forward.

While short-term challenges of thin margins and moderate growth remain, over the long term, Shankara can unfold into a good story. Since pricing is not too steep, one can apply to the issue, with a long term view.

Disclosure: No Interest.
8.1. AKH  Mar 23, 2017 10:23:12 AM IST

Shankara Building Products Ltd IPO

very good
copy paste
7. VALUE INVESTOR  Mar 21, 2017 5:51:06 AM IST Reply

Avenue Supermarts Limited IPO

Players who have bought Avenue Supermarts shares at a hefty premium in the illegal grey market, as well as high networth individuals who have bought shares on borrowed funds, are a jittery lot ahead of the listing of the shares on Tuesday.

For the HNIs, Avenue shares need to list around Rs 450—nearly a 50 percent premium to the issue price—for them to make a meaningful profit. Given the strong demand during the bidding period, it does look like there will be strong follow-up buying.

However, HNIs and players who have bought in the grey market sell within minutes of listing as the losses can be huge if they hang on to their position and the price moves against them.
6. VALUE INVESTOR  Mar 20, 2017 6:29:04 PM IST Reply

CL Educate Ltd IPO

very small issue size.
5. VALUE INVESTOR  Mar 18, 2017 10:56:17 AM IST Reply

Avenue Supermarts Limited IPO

Again 0/4, Bad Luck Following me here also :-) after MBL
4. VALUE INVESTOR  Mar 15, 2017 12:31:59 PM IST Reply

Music Broadcast Ltd IPO

again BIG ANDA O from karvy.
3. VALUE INVESTOR  Mar 8, 2017 4:43:28 PM IST Reply

Avenue Supermarts Limited IPO

Analysis of upcoming IPO of Avenue Supermarts has been loaded on

You can access it in the Free Zone in the IPO Analysis section. The section can be accessed at:

IPO Analysis: Avenue Supermarts Limited
Verdict: A value(able) cart!
Avenue Supermarts is entering the primary market on Wednesday 8th March 2017 to raise Rs. 1,870 crore via fresh issue of equity shares of Rs.10 each, in the price band of Rs.295 to Rs.299 per share. Representing 10.02% of the post issue paid-up share capital, at the upper end, the issue closes on Wednesday, 10th March and is likely to list on 20th March.
Avenue Supermarts, 91.36% owned by ace investor Radhakishan Damani and family, runs 118 food and grocery stores, under ‘DMart’ brand, covering 3.6 million sq.ft. retail space, mainly across Western India, with ~75% stores concentrated in Maharashtra and Gujarat. With USP of value-retailing, most of its stores are owned, unlike organized competition operating on leased premises, giving the company savings of nearly 7-8% of sales as lease rentals, a key edge over peers, mainly Reliance and Future Retail, in the listed space.
Company’s financial growth has been spectacular, to say the least. From FY14, while store count rose at 18% CAGR, from 75 to 117 (as of 31-12-16), revenue and PAT CAGR growth was much higher at 26% and 38% respectively, despite competition from e-commerce intensifying during this period. For FY16, on revenue of Rs. 8,588 crore, PAT of Rs. 319 crore was earned, translating into a net margin of 3.7%.
During first nine months of FY17, revenue and PAT has already surpassed full year performance of fiscal 2016, at Rs. 8,784 crore and Rs. 387 crore respectively, strengthening net margin to 4.4%. This kind of growth and margin strength on such high scale, with three quarter sales coming from food/ FMCG, amid tough competition, is a classic example of B-school case study, as retail is one of the most difficult businesses, given multiple operational challenges. Infact, world’s most well-respected investor Warren Buffet has described retail as a ‘have-to-be-smart-everyday-business’ given its complexity!
Objects of issue comprise (i) repayment of debt / NCDs worth Rs. 1,080 crore over FY18-FY20 (Rs. 625 crore in FY18, Rs. 320 crore in FY19, Rs. 135 crore in FY20) and (ii) construction and fit outs of new stores covering 2.1 million sq.ft., over FY18-FY20. This is significant expansion – almost 60% growth from the current retail area.
On equity of Rs. 561.54 crore, EPS for 9MFY17 came in at Rs. 6.9, up from FY16’s Rs.5.68. Current net worth stands at Rs. 1,905 crore, of which, 91.36% is owned by promoter and balance is with employees. Since dilution is small at just about 10%, promoter stake will remain high at 82.2%, post IPO, also indicating low float. Total debt, as of 31-12-16, stood at Rs.1,408 crore, while cash and equivalents was at Rs. 66 crore. Repayment from issue proceeds will curtail the current debt equity ratio of 0.7:1 to 0.2:1, coupled with equity expansion.
At Rs.299 per share, Avenue will have market cap of Rs. 18,660 crore and enterprise value (EV) of Rs. about 19,375 crore. This leads to EV/EBITDA and PE multiple of 18x and 31x respectively, based on FY17E numbers, which is favourable vis-à-vis Future Retail (not comparable with Reliance Retail). On one year forward (FY18E) estimates, these multiples for Avenue are at 14x and 25x respectively.
Below is a peer comparison for key large listed retailers:
Future Retail
Reliance Retail
No of stores
Retail Space (million sq ft)
35.9 mn

13.25 mn

9MFY17 Financials in Rs. crore

Gross Profit Margin

Valuation (FY17E)

Mcap (Rs cr)

EV (Rs cr)

EV/sales (x)


PE (x)

*only considered 231 Big Bazaar (large format) stores and 379 Easy day (small format)
Since Avenue has one of the best inventory management (holding just 26 sale days inventory as against 80-100 days for Future Retail), its EBITDA of 9% v/s 3-4% of peers, despite lower gross margin (as shown in above table) is a huge differentiation, given the wafer-thin margins of the industry. Also, Avenue has stores located in rich corridor of West India, as it adopted cluster-based expansion to keep costs under check, as against top-down approach beginning with metros tickling down to tier 3 towns. Thus, all this gives it a better turnover per sq. ft., higher return on capital employed and faster growth.
To conclude, Avenue Supermarts scores on fundamentals and pricing. Promoter standing is a cherry on the cake, making the issue a subscribe, both for short and long term.
Disclosure: No interest.

Investment Adviser

2. VALUE INVESTOR  Mar 1, 2017 6:07:43 PM IST Reply

Music Broadcast Ltd IPO

Analysis of upcoming IPO of Music Broadcast has been loaded on

You can access it in the Free Zone in the IPO Analysis section. The section can be accessed at:

IPO Analysis: Music Broadcast Limited
Verdict: Tune in!
Music BroadOFS) of upto 26.59 lakh equity shares by members of the promoter group, both in the price band of Rs.324 to Rs.333 per share. Representing 25.71% of the post issue paid-up share capital, at the upper end, the issue size is Rs. 489 crore and closes on Wednesday, 8th March. Shares are expected to be listed on BSE and NSE on 17th March.
Music Broadas radio stations free-to-air), close to 50% of which is from 3 cities alone - Mumbai, Bangalore and Delhi.
Since coming under Jagran Group’s fold in 2014 (from India Value Fund), company’s financials have strengthened vastly, thanks to synergies in operations and management experience coming in handy. While revenue has grown at a CAGR of 25% between FY14-16 to Rs. 245 crore, EBITDA growth was much stronger at 42% to Rs. 92 crore, as EBITDA margin improved to 38% in FY16, from 29% in FY14. Thus, FY16 PAT of Rs. 43 crore, posted 32% CAGR over 2 years from FY14 to FY16, resulting in net margin and EPS of 17% and Rs. 9.95 respectively.
For first 6 months of FY17, company posted revenue of Rs. 137 crore, EBITDA of Rs. 47 crore and PAT of Rs. 30 crore, improving net margin to 21.5%. On then equity of Rs. 41.92 crore (30-9-16), EPS stood at Rs. 6.6 for H1FY17. In Nov 2016, it acquired 8 Radio Mantra FM stations from promoter group, via issue of 31.25 lakh equity shares (approx. consideration of Rs. 100 crore, at IPO price), which expanded equity to Rs. 45.04 crore. Of this, 96.34% stake is held by promoters (89.40% by Jagran Prakashan, balance by group directors).
At Rs. 333 per share, company will have a market cap of Rs. 1,900 crore. Its total debt, as of 30-9-16, was Rs. 250 crore, while cash and equivalents are Rs. 46 crore. Of the fresh issue proceeds, nearly Rs. 250 crore will go to retire debt in FY17 and FY18 and another Rs.50 crore in FY20. Thus, interest outgo of Rs. 16 crore per annum currently will be saved, which will directly augment bottomline, FY18 onwards.
Based on enterprise value of Rs. 1,900 crore, annualized H1FY17 earnings discounts the issue price by EV/EBITDA multiple of 20x and a PE multiple of 25x, on current year estimates. On one year forward estimates (FY18), these multiples are 19x and 24x respectively.
Below is the comparative peer group analysis:

Music Broadcast
Entertainment Network
Zee Media
Key Brand

Radio City
Radio Mirchi
92.7 Big FM*
Current radio stations
In million
50 million
60 million
43 million
H1FY17 annualised Revenue
Rs. crore
H1FY17 annualised EBITDA
Rs. crore
H1FY17 Annualised PAT
Rs. crore
PAT Margin
Enterprise Value (EV)
Rs. crore
Valuation Multiples
Current Year, based on above H1FY17 annualised numbers




*proposed to be acquired by Zee Media from Reliance Broadcast, ^Total consideration price announced.
Times Group’s 42 Radio Mirchi FM stations, housed under Entertainment Network (India), command 30% market share and have a market cap of Rs. 3,950 crore. Since its margins have been fluctuating (9mFY17 EBITDA margin 27% vs 38% in FY16), the valuation multiple, especially PE (69x) is very steep (PE multiple based of FY16 EPS of Rs. 23 stands at 36x, FY16 net margin). In relation to ENIL, Music Broadcast’s pricing look attractive, on all counts – EV/sales, EV/EBITDA, PE and EV/station.
However, based on Subhash Chandra’s Zee Media Corp’s announced acquisition of Reliance ADAG’s 45 operational FM stations 92.7 Big FM for Rs. 1,592 crore last November, the pricing of the current primary offering appears rich. With whatever little financials available in the public domain for 92.7 Big FM, on similar topline of about Rs. 280 crore, EV/EBITDA of Music Broadcast’s 20x is much higher than Big FM’s 14x. However, Big FM was an M&A deal versus an issue to public investors here, while EBITDA margins in the industry are quite volatile given its nature of heavy dependence on advertisements.
Thus, based on pure play listed peer comparison, pricing is fair. Expected double digit growth, Jagran group pedigree, growth trajectory of radio industry and current market fancy for new ideas due to dearth of opportunities in the secondary space, market being just 4% off all-time highs, share looks promising and one may apply in the issue.

Disclosure: No Interest.
2.1. AKH  Mar 1, 2017 8:35:39 PM IST
1. VALUE INVESTOR  Feb 10, 2017 2:28:16 PM IST Reply

Avenue Supermarts Limited IPO

I think this may turn out like ICICI Prudential.
Issue size is too big to command such high grey market premium.
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