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Review By Dilip Davda on June 20, 2017
Bansal Multiflex Ltd (BML) is engaged in trading of cloth, different type of semi furnished fabrics, varieties of finished fabrics. It is also engaged in trading of different type of chemicals primarily used in making detergent and soaps. BML also engages services of third party job workers for processing of grey cloth which includes dying, bleaching, printing, drying etc. The company sells the semi-finished and finished product to garment houses for manufacturing of garments in the apparel industry. BML’s Product portfolio comprises of Grey fabric, Cotton Fabric, Dress materials, Matching Twill Fabrics, Satin fabrics, Slub Satin Fabrics, Cotton Slub fabrics, Dobby fabrics, Meti fabrics, Jute Fabrics, Denim Fabric, Xford Fabrics, Rencho Fabrics, Micro Cotton Fabrics and Raymond Cotton Fabrics under the spectrum of fabric and cloth and Acid Slury (LABSA),AOS Chemicals, Caustic Flakes, Caustic Soda Flakes under the spectrum of chemicals.
To part finance its working capital and general corporate funds need, the company is coming out with a maiden IPO of 2000000 equity share of Rs. 10 each with a fixed price of Rs. 31 per share to mobilize Rs.6.20 crore. Issue opens for subscription on 30.06.17 and will close on 04.07.17. 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 Pantomath Capital Advisors Pvt Ltd. and Bigshare Services Pvt Ltd is the registrar to the issue. Company’s entire equity is issued at par. Post IPO its current paid up equity capital of Rs. 5.41 crore will stand enhanced to Rs. 7.41 crore.
On performance front, for last three fiscals it has posted turnover/net profits of Rs. 1.40 cr. / Rs. 0.001 cr. (FY14), Rs. 1.77 cr. / Rs. 0.01 cr. (FY15) and Rs. 2.13 cr. / Rs. 0.02 cr. (FY16). For nine months ended on 31.12.16 of the current fiscal, it has posted net profit of Rs. 0.38 crore on a turnover of Rs. 11.77 cr. If we annualize the latest earnings and attribute it on fully diluted equity post IPO, then asking price is at a P/E of around 44 plus making this issue a costly bet. Its average RoNW for last three fiscals is 25.86%. According to offer documents, the company has no listed peers to compare with. Performance does not justify the pricing of the issue.
On merchant banker’s front, this is the 39th mandate from its stable in last three years that have shown mixed trends with average returns in most of the cases. Out of last 10 issues one has closed at par and the rest have closed with some premium to offer prices on listing date.
Conclusion: Only risk savvy cash surplus investors may consider moderate investment for long term in this costly bet.
Review By Dilip Davda on June 20, 2017
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 Bansal Multiflex Ltd offers an early investment opportunity in Bansal Multiflex Ltd. A stock market investor can buy Bansal Multiflex IPO shares by applying in IPO before Bansal Multiflex Ltd shares get listed at the stock exchanges. An investor could invest in Bansal Multiflex IPO for short term listing gain or a long term.
Read the Bansal Multiflex IPO recommendations by the leading analyst and leading stock brokers.
Bansal Multiflex IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Bansal Multiflex IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Bansal Multiflex 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 Bansal Multiflex IPO.
The Bansal Multiflex IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Bansal Multiflex IPO allotment status to check.
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