Akme Star Housing Finance Ltd IPO Review (Avoid)

Review By Dilip Davda on Feb 19, 2015

Akme Star Housing is registered with NHB and is engaged in is housing finance business. It is aiming to provide home loans finance to weaker sections of the society, group housing societies and NGOs engaged in the welfare of the weaker section. Thus it is consciously targeting markets that are relatively underpenetrated.

To meet its funds requirement and raising corpus fund, it is coming out with a public issue of 16,00,000 equity share of Rs. 10 each at a fixed price of Rs. 30 per share to mobilize Rs. 4.80 crore. Issue opens for subscription on 25.02.15 and will close on 05.03.15. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. After this issue its current equity capital of Rs. 4.33 crore with rise to Rs. 5.93 crore.

On performance front, the company has posted an average EPS of Rs. 1.85 for last three fiscals and NAV is at Rs. 46.74 per share as on 31.03.14 (on an equity capital of Rs. 2.17 crore). For these three fiscals it posted turnover/ net profits of Rs. 0.44 crore/Rs. 0.13 crore (2012), Rs. 0.74 crore/Rs. 0.19 crore (2013) and Rs. 1.37 crore/Rs. 0.37 crore (2014) respectively. There is nothing great. However, this IPO is entering as BSE has revised guidelines for SME IPOs with higher parameters which are not met by this company as it had filed its draft before such announcement.

For the first half of current fiscal it has earned net profit of Rs. 0.24 crore on total income of Rs. 0.95 crore. After subscription for equity at par at the time of MoA it raised further equity at a premium of Rs. 10 to Rs. 50 per share during March 2007 to March 2014 and then issued bonus shares in the ratio of 1 for 1 in September 2014. Thus equity of Rs. 2.17 crore as on 31.03.14 jumped to Rs. 4.33 crore on 30.09.14. Based on its latest equity, the first half EPS is just at 1.11 on annualized basis translating in to P/E of 27 plus and if we attribute the said earnings on post IPO equity then the asking price is at a P/E of 53 plus making it a pricy bet.

Issue is lead managed by Sarthi Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. This is the 8th mandate from lead manager that has average track record for earlier mandates.


Conclusion / Investment Strategy

On prima facie basis, this SME offer is at higher P/E and low preference for SME IPOs by the broking community at large due to entry barriers, it is not worth. However, HNIs with surplus funds may invest at their own discretion for long term.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Feb 19, 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

Akme Star Housing Finance IPO FAQs

  1. 1. Why Akme Star Housing Finance IPO?

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

  2. 2. How is Akme Star Housing Finance IPO?

    Read the Akme Star Housing Finance IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Akme Star Housing Finance IPO what should investors do?

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

  4. 4. Is Akme Star Housing Finance IPO good?

    Our recommendation for Akme Star Housing Finance IPO is to avoid.

  5. 5. Is Akme Star Housing Finance IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Akme Star Housing Finance IPO.

  6. 6. When will Akme Star Housing Finance IPO allotment status?

    The Akme Star Housing Finance IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Akme Star Housing Finance IPO allotment status to check.

  7. 7. When will Akme Star Housing Finance IPO list?

    The Akme Star Housing Finance IPO will list on Friday, March 20, 2015, at BSE SME.








Search Chittorgarh.com:

Download Our Mobile App

Android App iOS App