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Monarch Health Services Ltd IPO Review (Avoid)

Secondary market is in search of new bottom as even after postponement of GAAR by a year and few more relaxation in budgetary proposals, market did not gained and marked recent new lows. SMFL IPO failed and while we have an IPO from Plastene India via book building route, we are witnessing another small IPO daring to test the mucky waters. This is the SME platform IPO from Monarch Healthcare Services Ltd. (MHSL)

The company engaged in healthcare services related business is floating this issue with a fixed price of Rs. 40 per share and offering 3000000 equity shares of Rs. 10 each for subscription. The issue opens on 12.05.12 and will close on 16.05.12. Out of this 50% is reserved for retail investors and the balance is for promoters, promoters' group, corporate bodies and market makers. Company is mobilizing Rs. 12 crore to finance its healthcare service centres in Mumbai and other cities. As the company is new, it has not yet started any operations and hence no performance figures are available.

For this IPO minimum application is to be made for 3000 shares and in multiples thereof. Post issue, shares will be listed on BSE-SME platform. Networth Stock Broking Ltd is the sole manager as well as market maker for this IPO. Sharepro Services India Pvt. Ltd. Is the registrar to the issue.

The first such IPO of BCB Finance that got listed and having a minimum lot for trading of 4000 shares on BSE SME platform is not doing well. There too the minimum application size was of 4000 shares at an offer price of Rs. 25 per share. This is really wondering that a relatively small company floating small IPO is compelled to have a minimum lot of application ranging above Rs. 1 lakh. With this kind of minimum lot, will retail investors come forward in the given time to support SME platform? Even post listing, minimum trading lot of 3000 shares in case of this company will also make it unattractive to find new investors. With placement at premium to promoter group, NAV is boosted up to around Rs. 34.

Conclusion / Investment Strategy

Well, today's investors are really shrewd enough and understand better on such gimmicks. This IPO is only for those who have surplus funds and can wait for long to get returns from the company that has yet to start operations.

Review By Dilip Davda on May 11, 2012

The Monarch Health Services 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 Monarch Health Services IPO worth investing. The Monarch Health Services IPO Note sets the IPO expectations in systematic way which tells you if Monarch Health Services IPO good to buy (good or bad / yes or no). The IPO Forecast tells you weather to invest in Monarch Health Services IPO by providing IPO recommendations i.e. subscribe, avoid and neutral.

Review Author

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. With entry barriers, SEBI wants only well informed investors to participate is such offers. With crazy recent listings, SME IPOs have started drawing attention of investors across the board. However, as SME issues have entry barriers and continued low preference from broking community, any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on information available as on date coupled with market perceptions. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).

About Dilip Davda

Dilip Davda, a freelance journalist

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 new papers.



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