Art Nirman NSE SME IPO review (Avoid)

Review By Dilip Davda on Sep 29, 2016

Art Nirman Ltd (ANL) is in the business of real estate development in and around Ahmedabad, Gujarat. It has undertaken a project of 5 towers with 154 flats of 2 and 3 BHK and 25 commercial shops in 2016 and has sold 129 flats and 21 shops and for the balance, it has received bookings. ANL also undertakes work contracts for the development of residential and commercial projects.

To part finance working capital needs and general corpus fund requirements, the company is coming out with a maiden offer of 2004000 equity share of Rs. 10 each at a fixed price of Rs. 25 per share to mobilize Rs.5.01 crore. Issue opens for subscription on 30.09.16 and will close on 07.10.16. Minimum application is to be made for 6000 and in multiples thereon, thereafter. Issue is solely managed by Hem Securities Ltd and Sharex Dynamic (India) Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on NSE SME Emerge platform. After issue of initial equity at par in March 2016, it issued shares at a fixed price of Rs. 25 per share in September 2016. Post issue its current paid up equity capital of Rs. 5.60 crore will stand enhanced to Rs. 7.60 crore.

On performance front, since its main activities started only in FY 16, it has posted a turnover of Rs. 25.64 crore with a net profit of Rs. 0.47 crore. If we attribute this earnings on fully diluted equity post issue then asking price is at a P/E of 40 plus against industry composite of 25 and that makes it a costly bet.

On merchant banker's front, this is the 24th mandate from its stable and earlier mandates have shown mixed trends.

Conclusion: Being a costly bet, investors may give it a miss.


Conclusion / Investment Strategy

Being a costly bet, investors may give it a miss. The asking price is at a P/E of 40 plus against industry composite of 25 and that makes it a costly bet.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Sep 29, 2016

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

Art Nirman IPO FAQs

  1. 1. Why Art Nirman IPO?

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

  2. 2. How is Art Nirman IPO?

    Read the Art Nirman IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Art Nirman IPO what should investors do?

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

  4. 4. Is Art Nirman IPO good?

    Our recommendation for Art Nirman IPO is to avoid.

  5. 5. Is Art Nirman IPO worth Investing?

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

  6. 6. When will Art Nirman IPO allotment status?

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

  7. 7. When will Art Nirman IPO list?

    The Art Nirman IPO will list on Wednesday, October 19, 2016, at NSE SME.








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