B C Power Controls Ltd IPO Review (Avoid)

Review By Dilip Davda on Feb 20, 2014

B. C. Power Control Ltd :(BCPCL) is one of the leading players in the Wire & Cable Industry and is among the largest Wire & Cable manufacturers in India. Driven by innovation and heavy investment in Research & Development, the company introduces wires with prime concern on safety, security and durability. In the year 2010, the Company made the backwards integration installing the Copper and Aluminium wire drawing facility which, in turn, added value to the organization in terms of economies of scale and production of Copper and Aluminium wires. BCPCL manufacturers of Wires & Cables which include Armoured Cable, Unarmoured Cable,Flexible & House Wires, Submersible Cable, Control & Instrumentation Cable.

 

 To meet its working capital and general corpus fund requirements the company is coming out with an IPO of 5760000 equity share of Rs. 10 each with a fixed price of Rs. 18 per share (i.e. with a premium of Rs. 8 per share) to mobilize Rs. 10.37 crore. Issue opens for subscription on 24.02.14 and will close on 28.02.14. Minimum application is to be made for 8000 shares and in multiples thereof, thereafter. Shares will be listed on BSE SME. Sarthi Capital Advisors Pvt. Ltd. is the sole lead manager and Bigshare Services Pvt Ltd. is the registrar to the issue.  Its current equity capital is Rs. 6 crore. Post issue it will stand enhanced to Rs.11.76 crore.  On 31.03.2011 and 30.03.2012 it issued 994000 and 906000 equity shares to promoters at a price of Rs. 50 per share and then issued bonus in the ratio of 2 for 1 taking the total equity to Rs. 6 crore.

 

On performance front, for past three fiscals it has posted an average EPS of Rs. 2.80 on an equity capital of Rs. 2 crore. For six months ended 30.09.13 it has earned net profit of Rs. 0.08 crore on a turnover of Rs. 46.86 crore giving an annualized EPS of Rs. 0.27 and if we attribute this earnings on enhanced equity then EPS comes to Rs. 0.14 per share and this translated the asking price at a P/E of 128+ and at a P/BV of 1+ with NAV at Rs. 16.95 as at 30.09.13.

 

On the merchant banker’s front, this is the 5th mandate from it in SME sector till date and has mixed trends post listing for earlier four mandates.


Conclusion / Investment Strategy

 

Avoid this highly priced issue that also has entry barrier.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Feb 20, 2014

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

B C Power Controls IPO FAQs

  1. 1. Why B C Power Controls IPO?

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

  2. 2. How is B C Power Controls IPO?

    Read the B C Power Controls IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. B C Power Controls IPO what should investors do?

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

  4. 4. Is B C Power Controls IPO good?

    Our recommendation for B C Power Controls IPO is to avoid.

  5. 5. Is B C Power Controls IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the B C Power Controls IPO.

  6. 6. When will B C Power Controls IPO allotment status?

    The B C Power Controls IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit B C Power Controls IPO allotment status to check.

  7. 7. When will B C Power Controls IPO list?

    The B C Power Controls IPO will list on Friday, March 14, 2014, at BSE SME.








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