While we have 10th BSE SME platform IPO of Comfort Commotrade opening on 05.09.12, we have first IPO from Thejo Engineering Ltd for listing on NSE (SME) EMERGE platform.. Thus with this issue, NSE is breaking the ice for small IPOs. Details of this IPO are as under:
Thejo Engineering Ltd. (TEL) is the Chennai based light engineering company engaged in providing engineering solutions for bulk material handling, mineral processing and corrosion protection in core sectors like mining, power, steel, cement, ports, fertilizers etc. Thus it is one of the few companies in sub continent offering all major solutions under one roof. The Company has 4 manufacturing units in and around Chennai with a pan India presence through 11 branch offices and 36 site offices. TEL's presence through partnerships and distribution network extends across Australia, Kingdom of Saudi Arabia, the USA, Germany, Chile, Brazil and Ghana.
The company now mulls expansion in global reach and setting up subsidiary at Australia, putting up a manufacturing unit for polyurethane for captive consumption, setting up a lining division and general corpus fund. To part finance this to the tune of Rs. 21 crore, the company is offering around 488370 equity shares of Rs. 10 each within a price band of Rs. 402-430. Issue opens for subscription on 04.09.12 and will close on 06.09.12. Post allotment; the shares will be listed on NSE EMERGE platform. Issue is lead managed by IDBI Capital Market Services Ltd. and Cameo Corporate Services Ltd is the registrar to the issue. CRISIL has rated this IPO as "SME 5/5" indicating excellent fundamentals of the company. Thus even though rating was not mandatory, the company has gone for it for more transparency.
As far as Lead Manager's track records are concern, out of last 16 IPO mandates it has only 50% IPOs gave listing gains. Thus it has 50:50 ratio of success.
On the performance front, TEL has posted an average EPS of Rs. 52.32 for the last three fiscals. For the year 2011-12 EPS stands at Rs. 76.17. The company issued 1 for 2 bonuses in 1994 and 2001. Its current equity of Rs. 1.24 crore is supported by free reserves of Rs. 28.76 crore. Even if we take fully diluted equity post IPO the issue is being made at a P/E of around 8 and below 2 P/BV. Thus the issue is low risk-high return one.
Review By Dilip Davda on Aug 29, 2012
The Thejo Engineering 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 Thejo Engineering IPO worth investing. The Thejo Engineering IPO Note sets the IPO expectations in systematic way which tells you if Thejo Engineering IPO good to buy (good or bad / yes or no). The IPO Forecast tells you weather to invest in Thejo Engineering IPO by providing IPO recommendations i.e. subscribe, avoid and neutral.
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 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.
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