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Amsons Apparels Ltd IPO Review (Avoid)

Review By Dilip Davda on Dec 12, 2014

Amsons Apparels Ltd. (AAL): The Company is currently engaged in the business of trading of fabrics. It’s a multi-product fabric trading Company and its range includes fabrics for Silk, Polyester, Lace Fabrics, Netting Fabrics, Coarse Cotton Fabric, suiting, shirting, linen, jute and other fabrics. AAL primarily cater to retailers in Delhi and NCR Regions, wherein it supply mid range of unstitched fabrics. 

 

To meet its working capital and general corpus fund requirement, the company is coming out with its maiden IPO of 3250000 equity share of Rs. 10 each at par to mobilize Rs. 3.25 crore. Its present equity of Rs. 9.03 crore will rise to Rs. 12.28 crore post this issue. Issue opens for subscription on 16.12.14 and will close on 22.12.14. Minimum application is to be made for 10000 shares and in multiples thereof, thereafter. Issue is lead managed by BCB Brokerage Pvt Ltd. and Beetal Financial & Computer Services Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE SME. 

 

On performance front, the company has posted an average EPS of Rs. 1.45 for last three fiscals. For the fiscal ended 31.03.14 it has earned net profit of Rs. 0.04 crore on a turnover of Rs. 3.21 translating into an EPS of Rs. 0.09 on an equity base of Rs. 4.78 crore. For first half of current fiscal it has posted net profit of Rs. 0.02 crore on a turnover of Rs. 2.26 crore translating in to an EPS of Rs. 0.04 on an equity base of Rs. 9.03 crore.  Based on first half numbers, if we attribute earnings on fully diluted equity post this issue, even at par value asking price is at a whooping 250 P/E. 

 

On merchant banker’s front, this is the second mandate and it has poor track record.


Conclusion / Investment Strategy

Although this IPO is at par value, considering high P/E and low preference for SME IPOs among investors and broking community, only HNIs with surplus fund can invest at their own discretion keeping in mind the entry and exit barriers. 

(Disclaimer: Author has no plans to invest in this IPO)

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Dec 12, 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

Amsons Apparels IPO FAQs

  1. 1. Why Amsons Apparels IPO?

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

  2. 2. How is Amsons Apparels IPO?

    Read the Amsons Apparels IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Amsons Apparels IPO what should investors do?

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

  4. 4. Is Amsons Apparels IPO good?

    Our recommendation for Amsons Apparels IPO is to avoid.

  5. 5. Is Amsons Apparels IPO worth Investing?

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

  6. 6. When will Amsons Apparels IPO allotment status?

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

  7. 7. When will Amsons Apparels IPO list?

    The Amsons Apparels IPO will list on Tuesday, January 6, 2015, at BSE SME.