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Advitiya Trade BSE SME IPO review (Avoid)

Review By Dilip Davda on Mar 12, 2018

Advitiya Trade India Ltd. (ATIL) is a multi product trading organisation operating in Aluminium and metal products, Fabrics, Printers and other such profitable product segments in Northern India.

To part finance its working capital and general corpus fund needs, ATIL is coming out with a maiden IPO of 2872000 equity shares of Rs. 10 each with a fixed price of Rs. 15 per share to mobilize Rs.4.31 crore. Issue opens for subscription on 14.03.18 and will close on 16.03.18.Minimum application is to be made for 8000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Aryaman Financial Services Ltd. and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 28.97% of the post issue paid up capital of the company. Average cost of acquisition of shares by the promoters is Rs. 11.02 and Rs. 15.00  per share. After initial equity issue at par, it raised further equity in the price range of Rs. 10 and Rs. 15 between March 2017 and January 2018. Post issue, its current paid up equity capital of Rs. 7.04 cr. will stand enhanced to Rs. 9.91 cr.

As the company has been recently incorporated, it has a limited period performance. As per offer documents, it has posted a turnover of Rs. 19.72 crore with a net profit of Rs. 0.36 crore for the period ended 30.11.17 of the current fiscal. It has posted an EPS of Rs. 0.66. RoNW is not available due to part period working so far. Issue is priced at a P/BV of 1.31 on the basis of its NAV of Rs. 11.41 as on 30.11.17 and at a P/BV of 0.96 on the basis of post issue NAV of Rs. 15.55. It has no listed peers to compare with. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 27 thus it is priced aggressively.

On merchant banker’s front, this is 27th mandate from its stable in the past three years (includes 1 main board IPO and the rest SME). Out of last 10 listings, 4 opened at discount, 1 at par, 4 with the premium ranging from 1% to 20%. The only main board listing (Apollo Micro) opened at a premium of around 73.8% on the day of listing.


Conclusion / Investment Strategy

An aggressively priced offer from a company having very little performance is a risky bet. There is no harm in giving it a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Mar 12, 2018

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

Advitiya Trade IPO FAQs

  1. 1. Why Advitiya Trade IPO?

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

  2. 2. How is Advitiya Trade IPO?

    Read the Advitiya Trade IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Advitiya Trade IPO what should investors do?

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

  4. 4. Is Advitiya Trade IPO good?

    Our recommendation for Advitiya Trade IPO is to avoid.

  5. 5. Is Advitiya Trade IPO worth Investing?

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

  6. 6. When will Advitiya Trade IPO allotment status?

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

  7. 7. When will Advitiya Trade IPO list?

    The Advitiya Trade IPO will list on Monday, March 26, 2018, at BSE SME.