Agrimony Commodities Ltd IPO Review (Avoid)

Review By Dilip Davda on Jan 28, 2014

 

While main line IPOs are still seating on the fence even when market witnessed new higher benchmarks in secondary market simply due to lack of confidence in primary market operators/merchant bankers and the corporate at large, we have SME IPOs at regular intervals. Agrimony Commodities is the second SME IPO of CY 2014, details of the same are as under:

 

 

 

Agrimony Commodities (Erstwhile Transparent Commodities Pvt. Ltd.) is currently engaged in the business of trading of iron & steel products, suiting & shirting and other dress materials and agriculture products. Thus it is a multi-product trading company with a diverse product portfolio. It is in the process of adding the new products and also enhancing the portfolio within the existing categories.

 

 

 

The Company has plans to engage in buying and selling of various Agricultural as well as Non – Agricultural Commodities through Local Mandis and Markets and/or Exchanges either for arbitrage and/or investment as and when there is a suitable opportunity. It offers the commodity broking services through our subsidiary company Advantage Commodities Private Limited (ACPL). ACPL is engaged in the business of commodities broking through its membership of MCX. Our Company acquired shares of ACPL on August 13, 2013. ACPL has applied to MCX for approval for change in shareholding pattern amounting to change in management. The application is currently pending with MCX.

 

 

 

To augment the new plans, it is offering 3020000 equity share of Rs. 10 each at par to mobilize Rs. 3.02 crore. The IPO opens for subscription on 31.01.14 and will close on 04.02.14. Minimum application is to be made for 10000 shares and in multiples thereof, thereafter. Post allotment, shares will be listed on BSE SME.

 

 

 

On performance front, it has marked in-consistency. For seven eight months of the current fiscal ended 30.11.13 it has earned net profit of Rs. 0.06 crore on a turnover of Rs. 13.57 crore. For earlier three fiscals, it has posted an average EPS of Rs. 1.42 on an equity capital of Rs. 0.10 crore (as at 31.03.13) which stands enhanced to Rs. 5.57 crore on 30.10.13 and then to Rs. 8.37 crore on 13.12.13 with at par preferential issues to promoter group. This will further enlarge to Rs. 11.39 crore after this issue. So if one attribute first eight months earnings on enlarged equity post issue, it translates in an offer at a P/E of 125 even at par value.

 

 

 

Unicon Capital Services Pvt. Ltd. is the lead manager to this IPO and Purva Shareregistry (India) Pvt. Ltd. is the registrar to this offer.


Conclusion / Investment Strategy

 

Avoid

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Jan 28, 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

Agrimony Commodities IPO FAQs

  1. 1. Why Agrimony Commodities IPO?

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

  2. 2. How is Agrimony Commodities IPO?

    Read the Agrimony Commodities IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Agrimony Commodities IPO what should investors do?

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

  4. 4. Is Agrimony Commodities IPO good?

    Our recommendation for Agrimony Commodities IPO is to avoid.

  5. 5. Is Agrimony Commodities IPO worth Investing?

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

  6. 6. When will Agrimony Commodities IPO allotment status?

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

  7. 7. When will Agrimony Commodities IPO list?

    The Agrimony Commodities IPO will list on Tuesday, February 18, 2014, at BSE SME.

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