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Review By Dilip Davda on June 30, 2017
7NR Retails Ltd (7NRR) is engaged in the business of trading of apparels in the wholesale and retail segments. It focused on providing distinctive, high quality and trusted products to consumers at right price. Currently company is supplying and marketing all sizes of Kids Garments in attractive designs with eco-friendly products. It is selling its products under the Brand name “Gini & Jony” on retail as well as wholesale basis. Company has entered into master franchise agreement with Gini &Jony Limited for operating in the state of Gujarat. Currently 7NRR operates and manages four retail stores exclusively for kids apparel brand “Gini & Jony” across the state of Gujarat. It is also selling shirting and suiting under wholesale segment.
To part finance its working capital needs, the company is coming out with a maiden IPO of 1896000 equity share of Rs. 10 each with a fixed price of Rs. 27 per share. Issue opens for subscription on 05.07.17 and will close on 10.07.17. Minimum application to be made is for 4000 shares and in multiples thereon, thereafter. Post allotment shares will be listed on BSE SME. Issue is solely lead managed by Guiness Corporate Advisors Pvt Ltd and Cameo Corporate Services Ltd is the registrar to the issue. From MoA signing till March 2015 it issued all equity at par. In February 2017 it raised further equity at a price of Rs. 12 per share. Post issue, its current paid up equity capital of Rs. 5.09 crore will stand enhanced to Rs. 6.98 crore.
On performance front, the company has posted turnover/net profits of Rs. 5.02 cr. / Rs. – (0.16) cr. (FY14), Rs. 5.13 cr. / Rs. – (0.05) cr. (FY15), Rs. 3.45 cr. / Rs. – (0.30) cr. (FY16) and Rs. 11.42 cr. / Rs. 0.38 cr. (FY17). Thus while it has inconsistency in top line till FY 16 it reported sudden jump in it for FY17. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 50 and at a P/BV of 2.54. For last three fiscals, its average RoNW is negative at – (1.17) %. Thus issue is aggressively priced. As per offer documents, it has no listed peer to compare with.
On merchant banker’s front, this is the 31st mandate from its stable since 2012. However, from fiscal 2015-16 till this issue date, this is 16th IPO and out of last 10 IPO, four IPOs opened below the offer price on the day of listing.
Conclusion: Issue is aggressively priced and the company has inconsistent track record till FY16. Sudden jump in top line for FY 17 is surprising. There is no harm in giving this issue a miss.
Review By Dilip Davda on June 30, 2017
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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of 7NR Retails Ltd offers an early investment opportunity in 7NR Retails Ltd. A stock market investor can buy 7NR Retails IPO shares by applying in IPO before 7NR Retails Ltd shares get listed at the stock exchanges. An investor could invest in 7NR Retails IPO for short term listing gain or a long term.
Read the 7NR Retails IPO recommendations by the leading analyst and leading stock brokers.
7NR Retails IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the 7NR Retails IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for 7NR Retails IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the 7NR Retails IPO.
The 7NR Retails IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit 7NR Retails IPO allotment status to check.
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