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Review By Dilip Davda on March 8, 2018
Marvel Décor Ltd. (MDL) is engaged in manufacturing venetian blinds components and supplying it to the companies making venetian blinds. It also started manufacturing curtain rods and created a brand name “Marvel”. Later on it also ventured into roller blinds required by furnishing stores. It also added manufacturing of Bamboo, Vertical and Wooden Venetian blinds. It pioneers in introducing 9 blinds range at one single bound. It also introduces “Gallery” concept for marketing of its products. Currently it has 338 galleries in 224 cities of 24 states. It enjoys PAN India presence. Its Roller, Roman, Luzon and Vertical blinds are having higher demand in window furnishings.
To part finance its repayment of unsecured loans from promoters, working capital, general corpus fund needs, MDL is coming out with a maiden IPO of 4616000 equity shares of Rs. 10 each at a fixed price of Rs. 57 per share to mobilize Rs. 26.26 crore. Issue opens for subscription on 12.03.18 and will close on 15.03.18. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. It has reserved 100000 shares for eligible employees and is offering a discount of Rs. 5 per share. Post allotment, shares will be listed on NSE SME Emerge. Issue constitutes 27.09% of the post issue paid up equity capital of the company. 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. It has also issued bonus shares in the ratio of 1 for 1 in February 2010, 1 for 1 in March 2011, 2 for 1 in March 2012, 1 for 2 in March 2013 and 13 for 10 in Sept. 2017. Post issue its current paid up equity capital of Rs. 12.42 crore will stand enhanced to Rs. 17.04 crore. Average cost of acquisition of shares by promoters is Rs. 0.48 and Rs. 0.57 per share.
On performance front, MDL posted turnover/net profits of Rs. 27.74 cr. / Rs. 1.51 cr. (FY14), Rs. 22.41 cr. / Rs. 1.29 cr. (FY15), Rs. 28.80 cr. / Rs. 0.84 cr. (FY16) and Rs. 30.16 cr. / Rs. 1.30 cr. (FY17). For first half of the current fiscal, it has earned net profit of Rs. 1.42 cr. on a turnover of Rs. 17.74 cr. Thus last eighteen month results appear to have been cooked up before IPO. It suffered a setback for FY15 and posted lower net despite higher top line for FY 16. For last three fiscals it posted an average EPs of Rs. 0.92 and an average RoNW of 9.67%. Issue is priced at a P/BV of 5.63 on the basis of its NAV of Rs. 10.13 as on 31.03.17 and at a P/BV of 2.5 on the basis of post issue NAV of Rs. 22.84. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 34 plus. It has no listed peers to compare with. Pricing of the issue appears on the higher side.
On the merchant banker’s front, this is the 30th mandate in last three fiscals. Out of last 10 listings, 2 opened at discount to offer price, 2 at par, 5 with a premium ranging from 4% to 20% and 1 main board IPO with a premium of 140% on the listing day.
Company has made five bonus issues and coffers are empty. Pricing appears aggressive. Equity more than trebled post FY17. Considering all these, investors may consider investment at their own risk.
Review By Dilip Davda on March 8, 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 Marvel Decor Limited offers an early investment opportunity in Marvel Decor Limited. A stock market investor can buy Marvel Decor IPO shares by applying in IPO before Marvel Decor Limited shares get listed at the stock exchanges. An investor could invest in Marvel Decor IPO for short term listing gain or a long term.
Read the Marvel Decor IPO recommendations by the leading analyst and leading stock brokers.
Marvel Decor IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Marvel Decor IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Marvel Decor 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 Marvel Decor IPO.
The Marvel Decor IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Marvel Decor IPO allotment status to check.
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