Fiscal 2012-13 has begun on a cautious note as far as secondary market is concerned. But for primary market, it is Tribhovandas Bhimji Zaveri (TBZ)'s IPO that is breaking the ice and taking the onus to open the activity for the fiscal. No doubt after successful listings of recent issues of C Mahendra and Thangamail etc, this IPO was eagerly waited by the primary market investors.
145 year old jeweler is making a public offer of 16666667 equity share of Rs. 10 each within a price band of Rs. 120-126 via book building offer. The issue opens on 24.04.12 and closes on 26.04.12. With this offer, company is diluting little over 25% of post issue equity. Issue is lead managed by IDFC Capital and Avendus Capital and Karvy Computershare is the registrar to the issue. CRISIL has assigned IPO Grade 3 to this offer indicating at 'average fundamentals' of the company. Post issue shares will be listed on BSE and NSE. Minimum application is to be made for 45 shares and in multiples thereon thereafter. Company hopes to mobilize around Rs. 200-210 crore with this offer that will be utilized for expansion of its retail outlet and other general corporate requirements.
In October 2010 company issued bonus shares in the ratio of 4 shares for every 1 share held. Thus equity is increased to Rs. 50 crore. With this offer, the equity will rise to Rs. 66.67 crore.
On performance front, TBZ posted net profit of Rs. 16.94 crore and Rs.40.42 crore respectively for the fiscal 2009-10 and 2010-11 on a turnover of Rs. 885.25 crore and Rs. 1194.46 crore. For the first three quarters ended 31.12.2011 it has earned net profit of Rs. 50.50 crore on a turnover of Rs. 1118.58 crore. Based on this the company is likely to post an EPS of Rs. 10 plus on expanded equity base. Thus the IPO is priced at a PE of 12 and around 3.8 on P/BV basis, which looks a bit aggressive.
As for the BRLM's performance is concerned, IDFC Capital brought 13 issues out of which 5 issues failed to give returns to investors on debut day, whereas Avendus Capital brought 1 IPO that failed to give returns on debut day.
Gold jewellery retail biz, in which this company is mastering, was till this year dependent on cash purchases in a big way. Under new tax laws any purchase above Rs. 5 lakh PAN number is a must now and thus this biz might see some down trend. However, management has welcomed this move saying that it will bring in more transparency in this high profile business. Looking at the fancy enjoyed by such counters on the bourses, modest investment for long term investment recommended.
Review By Dilip Davda on Apr 18, 2012
The Bhimji Zaveri IPO Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered IPO Analysts tells you if Bhimji Zaveri IPO worth investing. The Bhimji Zaveri IPO Note sets the IPO expectations in systematic way which tells you if Bhimji Zaveri IPO good to buy (good or bad / yes or no). The IPO Forecast tells you weather to invest in Bhimji Zaveri IPO by providing IPO recommendations i.e. subscribe, avoid and neutral.
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. Any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.
(SEBI registered Research Analyst-Mumbai).
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.
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