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Review By MLR Securities Private Ltd on July 12, 2011
Issue Period: 11th July to 14th July
Price Range: INR 75-82
Issue Size: INR 50-55 Cr
Mcap: INR 119-130 Cr
IPO Grading: CARE IPO Grade 2
Grey Market Premium: INR 3-3.5
BRLM: Almondz Global Sec
Promoter: Mr Rakesh Bhhatia & Mrs Arti Bhatia
BGIL is into information technology based security and compliance automation systems majorly based on Radio Frequency Identification (RFID) platform (IT division) and has a technology‐based digital post production service (entertainment division). The IT division operations of BGIL are carried out from Noida and Mumbai branch office and the entertainment division operations are carried out from the Mumbai‐based digital post production studio. The IT division applications of the BGIL are majorly built on the RFID platform. RFID allows a tagged object to be identified when it comes in the radius of the RFID reader. The technology is used for automation of toll booths, parking management and asset tracking.
Apart from RFID technology, BGIL provides the automation solutions based on technologies such as smart cards, bar code, biometrics etc. BGIL procures the hardware equipments required in building the automation system and uses in house developed software to deliver the systems to customer. BGIL bags sub‐contracts from bigger automation players like Honeywell Automation Ltd. and iemensBuilding Technologies Ltd. Apart from the said sub‐contracts, BGIL derives revenues from relatively smaller contracts won directly from the end customers.
Mr Rakesh Bhhatia, the main promoter, is a Company Secretary by qualification and has business interests in varied fields of information technology, financial consultancy, entertainment, and related activities.
BGIL is asking for valuations of 26‐28 times FY11 EPS which is quite expensive to its closest peer Bartronics ltd which is trading at a TTM P/E of just 2. We recommend investors Avoid this issue.
The recommendation does not factor in any listing gains arising due to speculative interest considering its small issue size.
Review By MLR Securities Private Ltd on July 12, 2011
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