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Aurangabad Distillery NSE SME IPO review (Apply)

Review By Dilip Davda on Sep 28, 2016

Aurangabad Distillery Ltd (ADL) is one of the leading manufacturers of rectified spirit, denatured spirit and extra neutral alcohol. Molasses from sugar factories is the main raw material for the company which is used to manufacture all its products. The process also generates by-products like carbon dioxide and fuel oil that too are marketed by it. It enjoys advantage of its strategic location for its markets.

To meet repayment/pre-payment of loans and general corpus funds requirement, the company is coming out with a maiden IPO of 2200000 equity share of Rs. 10 each at a fixed price of Rs. 35 per share to mobilize Rs. 7.70 crore. Issue opens for subscription on 30.09.16 and will close on 06.10.16. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Issue is lead managed by Hem Securities Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on NSE SME Emerge platform. From incorporation till 2008 it issued all equity at par and then issued bonus shares in the ratio of 2 for 1 in May 2016. Its paid up capital will stand enhanced to Rs. 8.2 crore from the current Rs. 6.00 crore post IPO.

On performance front, for last four fiscals it has posted turnover / net profit of Rs. 28.66 cr. / Rs. 0.83 cr. (FY13), Rs. 33.21 cr. / Rs. 1.60 cr. (FY14), Rs. 36.25 cr. / Rs. (-2.45) cr. (FY15) and Rs. 46.35 cr. / Rs. 5.74 cr. (FY16). It suffered a setback in FY 15 with pressure on margins and deferred tax provisions. However, if we attribute the latest earnings on fully diluted equity post IPO, then asking price is at a P/E of 5 that appears reasonable against peers trading at a P/E of 14 to 32.

On merchant banker’s front, this is 23rd mandate from its stable and past mandates have shown mixed trends.

Conclusion: Investors may consider this IPO for medium to long term investment.

 


Conclusion / Investment Strategy

Investors may consider this IPO for medium to long term investment.  

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Sep 28, 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

Aurangabad Distillery IPO FAQs

  1. 1. Why Aurangabad Distillery IPO?

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

  2. 2. How is Aurangabad Distillery IPO?

    Read the Aurangabad Distillery IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Aurangabad Distillery IPO what should investors do?

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

  4. 4. Is Aurangabad Distillery IPO good?

    Our recommendation for Aurangabad Distillery IPO is to subscribe.

  5. 5. Is Aurangabad Distillery IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Aurangabad Distillery IPO.

  6. 6. When will Aurangabad Distillery IPO allotment status?

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

  7. 7. When will Aurangabad Distillery IPO list?

    The Aurangabad Distillery IPO will list on Monday, October 17, 2016, at NSE SME.