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Review By Dilip Davda on March 28, 2017
M K Proteins Ltd (MKPL) is a manufacturing and trading organization having its production/refining plant of Edible Oils. Its manufacturing process involves refining of Crude Oils to obtain Refined Rice Bran Oil, Canola Oil, Soya Bean Oil, Sunflower Oil and Rice Bran Bleached Oil. During the refining process certain by-products are also manufactured such as Rice Bran Fatty Acid Oil, Rice Bran Wax, Gums and Spent Earth which are also saleable. Further, MKPL also imports crude oils, process them and sell the finished product. The company also trades in both edible and non-edible oils.
To part finance its working capital and general corpus fund needs, the company is coming out with a maiden IPO of 14.62,000 equity share of Rs. 10 each at a fixed price of Rs. 70 per share to mobilize Rs. 10.23 crore. Issue opens for subscription on 31.03.17 and will close on 07.04.17. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Sarthi Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Its entire equity is issued at par plus it has issued bonus shares in the ratio of 3 for 1 (in February 2017). Its current paid up equity capital of Rs. 2.71 crore will stand enhanced to Rs. 4.17 crore post issue.
On performance front, the company has posted turnover/net profits of Rs. 85.40 cr. /Rs. 0.53 cr. (FY13), Rs. 121.73 cr. / Rs. 0.49 cr. (FY14), Rs. 123.23 cr. / Rs. 0.84 cr. (FY15) and Rs. 144.76 cr. / Rs. 0.72 cr. (FY16). For the first nine months of the current fiscal it has earned net profit of Rs. 0.41 crore on turnover of Rs. 110.98 crore. There in inconsistency in bottom lines despite higher top lines. If we annualize latest earnings and attribute on the fully diluted equity post issue, then asking price is at a P/E of around 53 and P/BV of 5 plus that makes it a costly offer.
On merchant banker’s front, this is the 24th IPO from its stable and previous mandates have shown some rewards on listing dates.
Conclusion: Considering aggressive pricing and inconsistency in bottom lines, only risk savvy investors with surplus funds may consider investment for long term.
Review By Dilip Davda on March 28, 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 M K Proteins Limited offers an early investment opportunity in M K Proteins Limited. A stock market investor can buy M K Proteins IPO shares by applying in IPO before M K Proteins Limited shares get listed at the stock exchanges. An investor could invest in M K Proteins IPO for short term listing gain or a long term.
Read the M K Proteins IPO recommendations by the leading analyst and leading stock brokers.
M K Proteins IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the M K Proteins IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for M K Proteins 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 M K Proteins IPO.
The M K Proteins IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit M K Proteins IPO allotment status to check.
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