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Prolife Ind NSE SME IPO review (Subscribe)

Prolife Industries Ltd (PIL) is engaged in the business of manufacturing special and exclusive range of intermediates for dyes, pigments, pharmaceuticals, agrochemicals and others. The company originally founded in the year 1994 in the name of Mamta Dyes & Intermediates Private Ltd and has been in this Industry from the very inception. Company has established even its own Research & Development Department within few years of incorporation of the company. It has already succeeded in developing very high quality Specialty Chemicals as result of thorough knowledge and R & D efforts. The company has established its presence in domestic as well export market and are regularly catering to the needs of their customers in many countries including U.S.A, Spain, Switzerland, Germany, France, Taiwan, Japan, Germany, Brazil etc.

At present the company is manufacturing mainly ranges of intermediaries for dyes, pigments, pharmaceuticals agro chemicals. PIL’s existing and proposed product and products mix are Dehydro Thio Para Toluidine Sulfonic Acid (DTPTSA), Amino Phenoxy Propane Sulfonic Acid (SPA), Amino Methyl Phenoxy Sulfonic Acid (SPMT), PYBIZS- 4-Nitrile-1-Hydroxy-8-Metoxy-3-Methyl Benzo [4,5] Imidazo [1,2A] Pyridine-7 & Sulphonic Acid & its sodium salt, Basic Red51/Red 76/Brown16/Brown17/Brown99/yellow-1/Yellow57/Orange31, 2-Chloro Methyl -3,4- Dimethoxy Pyridine, Octahydro-4B-Methyl-9 (Methylamino), Di Amino Bisphenoxy Ethane, 5-Methoxy 6- Amino Benz Imidazole Para Nitro Aniline, Epsilon Acid, 2:4 Di Nitro Aniline, Dichloro Para Nitro Aniline, Ortho Chloro Para Nitro Aniline, 6 Chloro 2:4 Di Nitro Aniline, 6 Bromo Di Nitro Aniline.

To part finance its expansion plans and meeting general corpus funding needs, the company is coming out with a maiden IPO of 1110000 equity shares of Rs. 10 each at a fixed price of Rs. 38 per share to mobilize Rs. 4.22 crore. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Issue opens for subscription on 27.12.16 and will close on 30.12.16. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 27.11 per cent of the post issue paid up equity capital of the company. Issue is solely managed by Swastika Investmart Ltd and Link Intime India Pvt. Ltd is the registrar to the issue. All equity so far is issued at par and a bonus share in the ratio of 1 for 1 in August 2016. Its current paid up equity capital of Rs. 2.98 crore will stand enhanced to Rs. 4.09 crore post IPO.

On performance front, the company has reported turnover/net profits of Rs. 19.06 cr. / Rs. 0.22 cr. (FY14), Rs. 19.89 cr./ Rs. 0.40 cr. (FY15) and Rs. 22.83 cr. / Rs. 0.59 cr. (FY16). For first quarter of the current fiscal, it has earned net profit of Rs. 0.17 cr. on a turnover of Rs. 4.19 cr. If we annualized these earnings and attribute on fully diluted equity post IPO then asking price is at a P/E of 22 plus making it a highly priced issue.

On merchant banker’s front, this is the first mandate from its stable and has no track records.

Conclusion: Only Risk aver cash surplus investors may consider long term investment.


Conclusion / Investment Strategy

Only Risk aver cash surplus investors may consider long term investment.

By Dilip Davda on Dec 26, 2016

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 (SEBI registered Research Analyst-Mumbai), a freelance journalist for more than 25 years, is a stock market analyst and news article writer. Since 1985, he has contributed to print media, electronic media and often appears on TV channels as visiting stock analyst. His articles are regularly publishes in Smart Investment (English and Gujarati weekly published from Ahmedabad), Free Press Journal and many other news papers & magazines. He is also a visiting stock analyst on DD News TV Channel.

Email: dilip_davda@rediffmail.com


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