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Review By Dilip Davda on August 20, 2015
Shree Pushkar Chemicals & Fertilizers Ltd. (SPCFL), (formerly known as Shree Pushkar Petro Products Ltd.), is an established market leader in the manufacture of Dyes & Dyes Intermediates. Its future development will have emphasis on safety and harmony with the environment. Company's manufacturing facilities are located near the commercial capital of India, i.e. Mumbai with an aggregate installed capacity of 10000 MT of various Dyes Intermediates. SPCFL pioneered with its 'Zero Waste' concept with backward integrations till now and is mulling forward integration.
To part finance its plans for acquisition of factory in MIDC area, setting up facility for reactive dyes, H-Acid and Vinyl Sulphone, setting up of effluent treatment plant, construction of additional godown and to meet corpus fund requirements, the company is coming out with a maiden IPO of approx 1.07 crore equity share of Rs. 10 each via book building route with a price band of Rs. 61-65 to mobilize around Rs. 70 crore. Issue consists of offer for sale of 2026589 equity share from existing shareholders and the rest as fresh equity. Minimum application is to be made for 200 shares and in multiples thereon, thereafter. Issue opens for subscription on 25.08.15 and will close on 27.08.15. The company issued equity at par since inception till 1998. In 2002 it issued equity at a price of Rs. 38. In 2006 it issued bonus in the ratio of 11 shares for every 13 shares held as well as fresh equity at par. From 2009 till 2011 it issued fresh equity between Rs. 10 and Rs. 26.56 and in August 2015 it made pre-IPO placement of 7.69 lakh odd shares at a price of Rs. 65 per share that raised the equity to Rs. 21.48 crore that will stand enhanced to approx Rs. 30.22 crore post IPO. Post allotment, shares will be listed on NSE/BSE. Sole BRLM of this IPO is Keynote Corporate Services Ltd and Bigshare Services Pvt Ltd is the registrar to the issue.
On performance front, for last three fiscals it has posted an average EPS of Rs. 6.77. Its turnover /net profit stood at Rs. 176.57 cr. /Rs. 7.25 cr. (FY13), Rs. 210.37 cr. /Rs. 10.44 cr. (FY14) and Rs. 266.81 cr. / Rs. 18.65 cr. (FY15). If we attribute latest earnings on fully diluted equity post IPO then asking price is at a P/E of around 10 that augurs well. As claimed in the RHP, there is no listed company which is exactly comparable having a similar business model as that of SPCFL. However as expressed in the RHP, listed companies in similar segments are having P/E in the range of 4 to 22. Thus this IPO appears to have been fully priced. However, it is noteworthy that for past five fiscals, company has consistently shown improvements in top and bottom lines and management is confident of maintaining the tempo.
Merchant banker has average track record for earlier mandates.
As this IPO below is Rs. 250 crore, it will attract "T" tag for the initial listing period that will keep short term investors away from it. However, it appears to be a safe long term bet and investors may consider investment.
Review By Dilip Davda on August 20, 2015
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 before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. 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 Shree Pushkar Chemicals and Fertilisers Ltd offers an early investment opportunity in Shree Pushkar Chemicals and Fertilisers Ltd. A stock market investor can buy Shree Pushkar Chemicals IPO shares by applying in IPO before Shree Pushkar Chemicals and Fertilisers Ltd shares get listed at the stock exchanges. An investor could invest in Shree Pushkar Chemicals IPO for short term listing gain or a long term.
Read the Shree Pushkar Chemicals IPO recommendations by the leading analyst and leading stock brokers.
Shree Pushkar Chemicals IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Shree Pushkar Chemicals IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Shree Pushkar Chemicals IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Shree Pushkar Chemicals IPO.
The Shree Pushkar Chemicals IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Shree Pushkar Chemicals IPO allotment status to check.
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RHP
