Aanchal Ispat Ltd IPO Review (Avoid)

Review By Dilip Davda on Nov 19, 2014

Aanchal Ispat Ltd (AIL) is engaged in manufacturing of Mild Steel TMT Re-bars, Structural Re-bars, Round and other Sectional products as per orders that are used in infra projects. Currently AIL has two manufacturing facilities, one for TMT Re-bars and other for Structural Re-bars with installed capacities of 21000 TPA and 24000 TPA respectively. The company is also engaged in the trading of the products like Mild Steel Billets, Cement & Clinker and TMT & Structural Re-Bars. It sells its products under the brand name “RELICON”. 

 

Now the company is undergoing modernization and expansion of capacities. Its TMT RE-bars capacity is being hiked to 75000 TPA. To part finance this company is coming out with an offer of equity share of Rs. 10 each at a fixed price of Rs. 20 per share. The company is issuing 8004000 equity shares to mobilize Rs. 16 crore. The issue opens for subscription on 24.11.14 and will close on 26.11.14. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Issue is lead managed by Inventure Merchant Bankers Services Pvt Ltd. and Purva Registry (India) Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE SME.  

 

On performance front, the company has posted an average EPS of Rs. 1.61 on the equity base of Rs. 4.28 crore as on 31.3.14. Between March 2006 to March 2013 the company made preferential allotments at a price ranging from Rs. 50 to Rs. 100 per share and in August 2014 it issue bonus in the ratio of 2 shares for every 1 share held. The equity has gone up to Rs. 12.85 crore as on 30.09.14. For first half of current fiscal the company has earned net profit of Rs. 0.35 crore on a turnover of Rs. 93.91 crore. If we attribute these earnings on fully diluted equity of Rs. 20.85 crore post this IPO, the asking price is at a P/E of 58 plus making it a costly bet. 

On merchant banker’s front, this is 11th mandate and earlier 10 mandates have mixed trends and few of them witnessed market operations.


Conclusion / Investment Strategy

 

Considering the barriers on minimum investment and low preference by major broking community, retail investors can avoid this issue. However risks aver high net-worth individuals may park their surplus funds in this costly bet at their own discretion.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Nov 19, 2014

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

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

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.

Email: dilip_davda@rediffmail.com

Aanchal Ispat IPO FAQs

  1. 1. Why Aanchal Ispat IPO?

    The initial public offer (IPO) of Aanchal Ispat Ltd offers an early investment opportunity in Aanchal Ispat Ltd. A stock market investor can buy Aanchal Ispat IPO shares by applying in IPO before Aanchal Ispat Ltd shares get listed at the stock exchanges. An investor could invest in Aanchal Ispat IPO for short term listing gain or a long term.

  2. 2. How is Aanchal Ispat IPO?

    Read the Aanchal Ispat IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Aanchal Ispat IPO what should investors do?

    Aanchal Ispat IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Aanchal Ispat IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is Aanchal Ispat IPO good?

    Our recommendation for Aanchal Ispat IPO is to avoid.

  5. 5. Is Aanchal Ispat IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Aanchal Ispat IPO.

  6. 6. When will Aanchal Ispat IPO allotment status?

    The Aanchal Ispat IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Aanchal Ispat IPO allotment status to check.

  7. 7. When will Aanchal Ispat IPO list?

    The Aanchal Ispat IPO will list on Wednesday, December 10, 2014, at BSE SME.








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