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Review By Dilip Davda on February 15, 2019
• GFL is in trading activities of metal and textile products.
• It has shown just four month's working post conversion in public limited company.
• Despite at par offer, it looks fully priced.
• LM ha average track record.
ABOUT COMPANY:
Gleam Fabmat Ltd. (GFL) is incorporated in June 2018. Prior to conversion in public limited company it was a proprietary concern carrying business under the name J P Metals. GFL currently trades in wide range of Aluminium products such as Aluminium Sheets, Aluminium Coils, Rivets etc. and textiles products. The Company plans to leverage its promoter networks in the trading community of Delhi and it has expanded its verticals by venturing into Fabric segment.
ISSUE DETAILS/CAPITAL HISTORY:
To part finance its working capital and general corpus fund needs, GFL is coming out with a maiden IPO of 3120000 equity shares of Rs. 10 each at par to mobilize Rs. 3.12 crore. Issue opens for subscription on 19.02.19and will close on 22.02.19. Minimum application is to be made for 10000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue constitutes 31.14% of the post issue paid up capital of the company. Issue is solely Lead Managed (LM) by Aryaman Financial Services Ltd. while Bigshare Services Pvt. Ltd. is the registrar to the issue. Company's entire equity is issued at par since inception. Average cost of acquisition of shares by the promoters is Rs. 10.00 per share. Post issue, GFL's current paid up equity capital of Rs. 6.90 cr. will stand enhanced to Rs. 10.02 cr.
FINANCIAL PERFORMANCE:
On financial performance front, as per offer documents, GFL has shown just four month's working for a period from June 2018 to September 2018. On this performance with non annualized data it has posted an EPS of Rs. 11.43 and RoNW of 14.01%. Issue is priced at a P/BV of 8.60 on the basis of its NAV of Rs. 11.63 as on 30.08.18 and at a P/BV of 9.80 on the basis of post issue NAV of Rs. 10.20. For the 4 months period it has posted net profit of Rs. 0.21 cr. on a turnover of Rs. 10.22 cr. If we annualize latest earnings and attribute it on fully diluted equity post issue then asking price is at a P/E of around 16 despite being at par offer.
COMPARE WITH LISTED PEERS:
As per offer documents, it has shown Garv Ind and Advitya Trade as its listed peers that are currently trading at a P/Es of around 46 and 138 (as on 15.02.2019 closing). Incidentally both these issues were from the same LM. However, they are strictly not comparable on an apple to apple basis.
MERCHANT BANKER'S TRACK RECORDS:
On merchant banker's track record front, this is 43rd mandate from its stable in last four fiscals. Out of last 10 listings, 1 opened at par and the rest 9 with a premium ranging from 0.02% to 0.06%. Thus it has managed to keep the counter in green on listing day.
The company has shown just four months working in offer documents. Based on it the issue is appearing fully priced. LM has average track record. Cash surplus risk savvy investors may consider investment in this offer at their own risk.
Review By Dilip Davda on February 15, 2019
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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. 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 their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About 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.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of Gleam Fabmat Limited offers an early investment opportunity in Gleam Fabmat Limited. A stock market investor can buy Gleam Fabmat IPO shares by applying in IPO before Gleam Fabmat Limited shares get listed at the stock exchanges. An investor could invest in Gleam Fabmat IPO for short term listing gain or a long term.
Read the Gleam Fabmat IPO recommendations by the leading analyst and leading stock brokers.
Gleam Fabmat IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Gleam Fabmat IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Gleam Fabmat IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Gleam Fabmat IPO.
The Gleam Fabmat IPO allotment status will be available on or around February 27, 2019. The allotted shares will be credited in demat account by March 1, 2019. Visit Gleam Fabmat IPO allotment status to check.
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