Sirca Paints India Limited IPO Message Board (Page 5)

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@IPOANALYSIS

what to do in Ridings?? HOLD??

Hold ridings

Doesn't looks good to me.. Avoiding this IPO

Once again i m telling you, jisko risk lena hai woh le sakte hai...after all market is risk awarding. You can make money or lose money.....????????????

average cost of promoters is 90 paisa and they are rewarding them hugely and will run away with your money and the issue is very very expensive

Ankur,

Dost, just want retailer not to get trapped in Navigant issues.
it is my observation that Navigant is good marketing but their stocks are dud. also navigant all issues are mostly delhi based companies
It will be win of such LM if people get trapped on their issues

if u check their previous issues like power and instrumentation, dr lalachandani and continental were all given good reviews . even in multiple whatsapp grp they manage to get their agents to spread these messages to subscribe. believe me they are very good marketing agents.

i am surprised how come they manage to get retailers trapped every time even with such dismal record.

ankur,
buddy it is just that i dont want people to get trapped in Navigant issues.
I am surprised how retailer go and apply in Navigantt issues even with dismal track record
Navigant mostly have issues from delhi based companies

Also, Navigant is a good marketing company but have duds on listing and long term
i have seen various whatsapp group get some people market these companies. it happened in continental seeds, power and instrumenation ,dr lal path. also navigant issues are mostly review good .

but hats of f to navigant for being succesful and able to come with new issues despite all failures. we should learn marketing skills from them

jab se yeh manhus sme open hua hai market have started falling.

hopefully intelligent retailers will cancel their application soon and wont risk their money in any navigant issue.

retailer are thinking they can get out on listing day with some premium but this stock has high chance of listing at 5 to 10 pc discount

it is almost impossible for navigant and new LM bhaijee to control this large issue .

Subscription details till now:
1      Qualified Institutional Buyers(QIBs)      0
1(a)      Foreign Institutional Investors(FIIs)       0
1(b)      Domestic Financial Institutions / Insurance Companies      0
1(c)      Mutual funds      0
1(d)      Others      0
2      Non Institutional Investors      6,48,000
2(a)      Corporates      2,48,800
2(b)      Individuals(Other than RIIs)      3,16,800
2(c)      others      82,400
3      Retail Individual Investors(RIIs)      27,74,400
3(a)      Cut Off      12,45,600
3(b)      Price bids      15,28,800
Total      34,22,400

Positives for the Company :

•      Sirca SPA Italy is a very old and experienced family run Company in this space, operating since 1972 onwards and operates with global turnover (in 72 countries) of 140 million euros (around 1100 crores). So a mid-sized company with 46 years of operations. Sirca India is backed by a solid and focussed player in its segment proven in terms of endurance to sustain through multiple cycles.

•      Sirca India, in terms of valuations seems reasonable to me. Post issue, extrapolated EPS is around 10.65 post issue for FY18 (assuming full year net profit at 19.5 crore for FY18), works out to a PE multiple of 15. Operating Cash flow is a concern, I will cover it the negatives.

Negatives for the Company :

•      Negative operating cash flow for FY18, mainly due to inventory increase by 3 Crores, short term loans increase by 6.6 crores and taxes by 5 crores. Company receivables days has increased in FY18. I have given the benefit of doubt here in favour of the Company, considered they had positive operating cash flow in the prior years.

•      Setting up and running a new manufacturing plant. This require a new expertise, which is not present with the Company which was mainly into distribution business and technical support, they lack experience/expertise in this area. What are positives/advantages for Sirca India to set up this manufacturing plant is not articulated well. Why is Sirca Italy not funding this expansion and also why do they hold only 5% of the Company are some questions which remains unanswered for me. One thing I heard in the interview on Quint was the Sirca Italy will help set up and run this plant for 3 years period, which is good since they have the expertise. Hope this move helps the Company to improve the PAT margins in the long run, improve the revenues and growth rate.

After witnessing the intense debate on Sirca outside and inside my mind, I subscribed to the issue today.

Paints stocks crashed today
crude price rising will cause paint companies to report very bad numbers as well as input cost rise

Sirca paints is going to be hammered on listing. all the marketing agents are giving false premium across all websites just like what happened in sarveshwar foods

repeat history of sarveshwar will happen in this one.

i am surprised why retailer want to get trapped again.

You are really very eagerly waiting for IPO not to get subscribed :D Its fun to listen to your comments.So eagerly trying to put negatives in market :D

IPO Analysis are you from some merchant banker like pentomath or something just trying to fight over here? defaming all the people over here and telling them as agents of some company.
just post what you feel about the ipo and you are done.people will follow what they want to.
so according to your words i would suggest you to stop barking and post your precious comments only for ipo.

After allocating 13,70,000 shares, remaining 35 lakh available for subscription. DRHP silent on ratio of shares with regard to Qib Hni Retail.

its AVOID in this market.

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Do not fight. Investors at this forum are smart enough to take decision to apply or not. Views from both of you are welcomed.

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keep barking company agent

Till now, the company imports products majorly from Sirca, Italy, and distributes these in India and to a few SAARC nations. Any appreciation in the $ rate will be a negative for the company. This $ negative will continue until the new manufacturing plant is set up in India.

The company's net profit after tax margins have shot up from 10% in 2015-16 t0 22% in 2017-18 (9 months). Does not look natural for a trading company.

The company faces competition from formidable players such as Asian Paints, Kansai Nerolac, Berger Paints, Akzo Nobel and
Shalimar Paints.

Company has experienced negative cash flows. The last 6 months cash flow is positive ONLY because the company has obtained 5.47 crores finance. Also, the cash loss of 3.38 crores from operations for the last reported 6 months is disturbing.

The BV of the company is 35.27, and it is being offered 4.5 times book, which seems expensive.

The promoters hold about 87 lakh shares and their cost works out to about 90 paise (thanks to a 122:1 bonus). Though SME promoters should reward themselves adequately, it is disheartening to see that the Sirca stock will cost 160 bucks to the retail investor. There seems to be very little left on the table for the average Joe.

For the 6 month period ending 30-9-17, the sales are 42 crores and the debtors are 30.5 crores and the inventory is 15 crores. That's too much. It implies the company extends a very generous credit period.

The company's profit for 6 months ending 30-9-17 is reported at 9.64 cr. Assuming the trend continues in 2018-19, the company will earn 19 crore profit on a post issue capital of 18.27 crores. yielding an EPS of 10.5, which looks good on the face of it. However, the sudden spike in the margins and the extended credit granted to debtors cast a shadow over the earnings.

The company has taken on lease 9 offices across India for which the lease period has expired. The company continues to occupy these premises and pays rent based on oral negotiations. It also hasn't complied with RBI's statutory filings in the past. This does not speak well of the company's business governance department.



CONCLUSION
an investor must remember that it is a trading company at the moment. It will set up a plant in the near future and its capacity utilization will be just 25% in the first year. It will take some time for it t become a manufacturing company, and till it becomes a full fledged one, it will remain a trading company.

The low cost of stock acquisition by the promoters, the generous credit forwarded to debtors, the inventory pile up, the sudden spike in margins, and a few other factors do convey the feeling that the issue is fully priced. Plus, it is going up against very formidable and established players in the market that don't give any quarter.

AVOID.

issue extended to tuesday. and so far very few bids. tough one.

Appreciate your study about this issue and recommend this issue ( A BIG AVOID ).

Listen to chairman interview on IPO proceeds.he say realisation of money used from this IPO proceeds to happen from 2020 onwards. It means no returns for 2 years in profits . No use to apply.high chance u can get at discount and maybe take a call after 2 years.

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also do remember navigant spread message of wrong premium to trap retailers.
check it on all previous issues like power instrumentation, continental and others. looks like huge marketing done to get their issues subscribed.

please remain cautious

Anchor Investors, QIB Subscriptions etc are a few things which shouldn't be considered at all if you don't like a company's business model, its valuations and fundamentals etc. I am avoiding this IPO after my own research irrespective of Anchors etc. Cheers.