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Review By Dilip Davda on April 21, 2018
Akshar Spintex Ltd. (ASL) is engaged in the manufacturing of 100% cotton yarn that includes combed, semi combed and carded yarn. It has installed capacity of total 24480 spindles . Plant is located at Kalavad, District Rajkot, Gujarat. ASL's activities include manufacturing, marketing of raw cotton, cotton bales, cotton seeds, yard and by-products. Plant is located in vicinity of main raw material i.e. sankar cotton.
To part fiancé its working capital and general corpus fund needs, ASL is coming out with a maiden IPO of 6747000 equity shares of Rs.10 each at a fixed price of Rs. 40 per share to mobilize Rs. 27.00 crore. Issue comprises of fresh equity issue of 999000 shares aggregating to Rs. 4.00 crore and offer for sale of 5748000 shares aggregating to Rs. 23 crore. Issue opens for subscription on 27.04.18 and will close on 03.05.18. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Issue constitutes 26.99% of post issue paid up capital of the company. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. It has issued entire equity since inception till now at par. Average cost of acquisition of shares by the promoters is Rs. 10 per share. Post issue its current paid up equity capital of Rs. 24 cr. will stand enhanced to Rs. 25 cr.
On performance front, ASL has posted turnover/net profits of Rs. 15.62 cr. / Rs. –(0.51) cr. (FY15), Rs. 59.84 cr. / Rs. 2.67 cr. (FY16), Rs. 90.39 cr. / Rs. 5.39 cr. (FY17). For first seven months ended on 31.10.17 of FY18 it has earned net profit of Rs. 2.79 cr. on a turnover of Rs. 55.60 cr. For last three fiscals it has posted an average EPS of Rs. 1.44 and an average RoNW of 11.50%. Issue is priced at a P/BV of 2.8 on the basis of its NAV of Rs. 14.30 as on 31.10.17 and at a P/BV of 2.61 on the basis of post issue NAV of Rs. 15.33. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 20 plus against industry average of 9. As per offer documents it is showing Vippy Spinpro and Sri Nachammai as its listed peer that are trading at a P/E of 8 and 10 (as on 20.04.18). Thus issue appears aggressively priced. However, it would be worthwhile to note that recent SME entrant Angel Fibers which is the nearest listed peer (with a capacity of 19584 spindles) and came with IPO at a price of Rs. 27 (at a P/E of around 13) is currently trading at Rs. 41 (at a P/E of around 31 – as on 20.04.18).
On merchant banker's front, this is 69th mandate from its stable in last four fiscals. Last 10 listings opened at a premium ranging from 1.6% to 20% on the offer price on the day of listing.
Review By Dilip Davda on April 21, 2018
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 Akshar Spintex Limited offers an early investment opportunity in Akshar Spintex Limited. A stock market investor can buy Akshar Spintex IPO shares by applying in IPO before Akshar Spintex Limited shares get listed at the stock exchanges. An investor could invest in Akshar Spintex IPO for short term listing gain or a long term.
Read the Akshar Spintex IPO recommendations by the leading analyst and leading stock brokers.
Akshar Spintex IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Akshar Spintex IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Akshar Spintex IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Akshar Spintex IPO.
The Akshar Spintex IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Akshar Spintex IPO allotment status to check.
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RHP
pls Advise me
this is my hard earned Money