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Ambition Mica BSE SME FPO review (Apply)

Review By Dilip Davda on Nov 15, 2017

Ambition Mica Ltd. (AML) is an ISI certified company primarily engaged in manufacturing of mid segment decorative laminates and door skins. AML markets its products under the brand names like Velson, Antique, Art Lam, Antique Aurum, Antique Colour Core and Antique Natural Wood. Door skins are marketed under brand names like Beautique, Texas, Micro Touch, Antique Natural Wood and Door Touch. Company has approximately 1571 designs in laminates and 452 in door skins.

Company came with its maiden offer in July 2015 and is already listed on BSE SME. To part finance its working capital and general corpus fund needs, AML is coming out with a FPO of 3000000 equity shares of Rs. 10 each via book-building route with a price band of Rs. 40-42 to mobilize Rs. 12 to Rs. 12.6 crore (on the basis of lower and upper price bands). Issue opens for subscription on 16.11.17 and will close on 21.11.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue constitutes 20.10% of the post issue paid up capital of the company. Cost of acquisition of shares by promoters is Rs. 3.33 per share. Issue is jointly lead managed by Pantomath Capital Advisors Pvt. Ltd. and Small Industries Development Bank of India (SIDBI). Karvy Computershare Pvt. Ltd. is the registrar to the issue. Raising equity at par between March 2010 and August 2013, it raised further equity via IPO at a price of Rs. 40 per share. It has also issued bonus shares in the ratio of 1 for 1 (May 2016) and 1 for 2 (February 2017). Post issue, its current paid up equity capital of Rs. 11.92 crore will stand enhanced to approx. Rs. 14.92 crore.

On performance front, AML has reported turnover/net profits of Rs. 35.57 cr. / Rs. 0.91 cr. (FY14), Rs. 38.18 cr. / Rs. 1.74 cr. (FY15), Rs. 49.32 cr. / Rs. 1.79 cr. (FY16) and Rs. 51.54 cr. / Rs. 1.99 cr. (FY17). Thus while its top line has seen continuous rising trends, bottom-line has not seen commensurate increase even though it has seen upward movement. Last two fiscal is performance has been mostly stagnant. For H1 of current fiscal, it has posted net profit of Rs. 0.84 crore on a turnover of Rs. 33.63 crore. This indicates pressure on margins as it is in the highly competitive field. For last three fiscals, it has posted an average EPS of Rs. 1.62 and average RoNW of 16.15%. Asking price is at a P/BV of 3.1 plus. If we annualize latest earnings and attribute it on fully diluted equity post issue, then issue is priced at a P/E of around 37 against industry average of 29. Thus issue is aggressively priced.

On merchant banker’s front, this is 54th mandate from Pantomath so far and last 10 listings have given rewards ranging from 0.002% to 20% on debut day in openings.. This is the 3rd mandate from SIDBI so far and last two listings have rewarded with around 13% on debut day in openings.

AML’s scrip has marked high of Rs. 80 and low of Rs. 39.90 in last three years against its maiden offer pricing of Rs. 40 per share. In 2016 it marked low of Rs. 23 (on ex-bonus basis). Last trade on this counter took place at a price of Rs. 50 per share (14.11.17)

Conclusion: Although issue is priced aggressively on the basis of its performances, its faring on bourses makes it an appealing investment. Investment may be considered for medium to long term. (Subscribe).


Conclusion / Investment Strategy

Although issue is priced aggressively on the basis of its performances, its faring on bourses makes it an appealing investment. Investment may be considered for medium to long term. (Subscribe).

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Nov 15, 2017

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

Ambition Mica FPO FAQs

  1. 1. Why Ambition Mica FPO?

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

  2. 2. How is Ambition Mica FPO?

    Read the Ambition Mica FPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Ambition Mica FPO what should investors do?

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

  4. 4. Is Ambition Mica FPO good?

    Our recommendation for Ambition Mica FPO is to subscribe.

  5. 5. Is Ambition Mica FPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Ambition Mica FPO.

  6. 6. When will Ambition Mica FPO allotment status?

    The Ambition Mica FPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Ambition Mica FPO allotment status to check.

  7. 7. When will Ambition Mica FPO list?

    The Ambition Mica FPO will list on Wednesday, November 29, 2017, at BSE SME.