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ASL Industries NSE SME IPO review (Avoid)

Review By Dilip Davda on Mar 28, 2017

ASL Industries Ltd (ASL) is engaged in the business of manufacturing of forged products and press shop for sheet metal products. Its products have varied applications and are used in various industries like railway, defense, and automobile. ASL provides one stop solution from metal forming to assembly under one roof along with logistics and just-in-time solutions. The company is capable of manufacturing both standardized as well as customized products. Its flexible manufacturing infrastructure enables us to extend product range and change product mix as per customer demand and requirement.

To part finance its working capital and corpus fund needs, the company is coming out with a maiden IPO of 28,00,000 equity share of Rs. 10 each at a fixed price of Rs. 35 per share to mobilize Rs. 9.80 crore. Issue opens for subscription on 31.03.17 and will close on 07.04.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Guiness Corporate Advisors Pvt Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. From inception till 1999 and in 2004 as well as in 2010 it issued few shares at par. It raised further equity in the price range of Rs. 16 to Rs. 50 per share (Rs. 10 FV) during 2002-2015. Its current paid up equity capital of Rs. 7.62 crore will stand enhanced to Rs. 10.42 crore post issue.

On performance front, the company has posted turnover/net profits of Rs. Rs. 40.68 cr. / Rs. (-0.67) cr. (FY13), Rs. 31.38 cr. / Rs. (-0.78) cr. (FY14), Rs. 44.98 cr. / Rs. (-0.002) cr. (FY15) and Rs. 56.08 cr. / Rs. 0.44 cr. (FY16). For first half of the current fiscal it has earned net profit of Rs. 0.13 cr. on a turnover of Rs. 28.32 cr. If we annualize latest earnings and attribute it to fully diluted equity post issue, then asking price is at a P/E of 140 against industry average of 42 plus making it a costly offer. It has still carried forward losses. Because of issue at premium its offer is around 1.2 P/BV but that does not matter.

On merchant banker’s front, this is the 16th mandate from its stable in last three years and as per prospectus details last 10 IPOs (excluding Sarthak) has shown mixed trends.

Conclusion: Being expensive offer and non-encouraging performance so far, one may give it a miss.


Conclusion / Investment Strategy

Being expensive offer and non-encouraging performance so far, one may give it a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Mar 28, 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

ASL Industries IPO FAQs

  1. 1. Why ASL Industries IPO?

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

  2. 2. How is ASL Industries IPO?

    Read the ASL Industries IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. ASL Industries IPO what should investors do?

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

  4. 4. Is ASL Industries IPO good?

    Our recommendation for ASL Industries IPO is to avoid.

  5. 5. Is ASL Industries IPO worth Investing?

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

  6. 6. When will ASL Industries IPO allotment status?

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

  7. 7. When will ASL Industries IPO list?

    The ASL Industries IPO will list on Tuesday, April 18, 2017, at NSE SME.