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Ahimsa Industries IPO Review (Avoid)

Review By Dilip Davda on Sep 20, 2015

Ahimsa Industries Ltd (AIL) that was primarily engaged in merchant exports of sugar confectionery machinery, moulds and plastic processing machinery has not started manufacture of PET performs and selling  under “Greenpet” brand. AIL’s client list include Railneer, Bisleri, Kingfisher, Royal Stag, RC Cola, City Cola, Big Cola etc.

To meet its working capital requirements, the company is coming out with a maiden IPO of 1518000 equity share of Rs. 10 each at a fixed price of Rs. 25 per share to mobilize Rs. 3.80 crore. Issue opens for subscription on 24.09.15 and closes on 01.10.15. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Issue is lead managed by Sarathi Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on NSE SME –Emerge. Post issue its existing paid up equity capital of Rs. 3.96 crore will stand enhanced to Rs. 5.47 crore. After at par issue since inception till December 2010, it issued preferential equity at a price of Rs. 500 per share in March 2011, at Rs. 58 in December 2012 and at Rs. 78 per share in February 2015. It has also issued bonus shares in the ratio of 1 for 1 in January 2004 and 5 for 1 in January 2015.

On performance front, the company has posted an average EPS of Rs. 0.04 for last three fiscals. For FY15 it has posted net loss of Rs. 0.81 crore on a turnover of Rs. 32.77 crore. Last three fiscals average RONW is negative 1.11. Thus having negative EPS and RONW for FY15 its issue is aggressively priced.

On merchant banker’s front, this is 12th SME IPO from its stable and past mandates have given average rewards post listings.


Conclusion / Investment Strategy

If we consider negative EPS for FY15 and RONW, this aggressively priced offer may be given a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Sep 20, 2015

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

Ahimsa Industries IPO FAQs

  1. 1. Why Ahimsa Industries IPO?

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

  2. 2. How is Ahimsa Industries IPO?

    Read the Ahimsa Industries IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Ahimsa Industries IPO what should investors do?

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

  4. 4. Is Ahimsa Industries IPO good?

    Our recommendation for Ahimsa Industries IPO is to avoid.

  5. 5. Is Ahimsa Industries IPO worth Investing?

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

  6. 6. When will Ahimsa Industries IPO allotment status?

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

  7. 7. When will Ahimsa Industries IPO list?

    The Ahimsa Industries IPO will list on Thursday, October 15, 2015, at NSE SME.