Bhakti Gems BSE SME IPO review (Apply at your own risk)

Review By Dilip Davda on May 11, 2017

Bhakti Gems and Jewellery Ltd (BGJ) is the manufacturer, wholesaler and supplier of gold jewellery and has its headquartered at Ahmedabad, Gujarat. Company mainly focuses on traditional Indian jewellery. Its products include handmade gold jewellery studded with precious and semi precious stones such as diamond, ruby, cubic zirconia (cz) etc. The jewelleries are designed by it and manufactured on job work basis at Ahmedabad, Rajkot and Mumbai. BGJ is a customer-centric Company; with a prime focus on attain the utmost client satisfaction by offering them quality assured products.

To part finance its working capital fund needs, the company is coming out with a maiden IPO of 1962000 equity share of Rs. 10 each at a fixed price of Rs. 20 per share to mobilize Rs. 3.92 crore. Issue opens for subscription on 17.05.17 and will close on 22.05.17. Minimum application is to be made for 6000 shares and in multiples thereof, thereafter. Post allotment, shares will be listed on BSE SME. Issue is lead managed solely by Guiness Corporate Advisors Pvt Ltd and Skyline Financial Services Pvt Ltd is the registrar to the issue. After initial MoA equity subscription at par, it issued equity in the price range of Rs. 40 to Rs. 50 per share from April 2010 to March 2017 and has also issued bonus shares in the ratio of 3 for 1 in February 2017. Post issue its current paid up equity capital of Rs. 4.85 crore will stand enhanced to Rs. 6.81 crore.

On performance front, while for the previous four fiscals it has shown continuous rise in top line, but bottom line marked inconsistency. Its turnover/net profits were Rs. 9.12 cr. / Rs. 0.003 cr. (FY13), Rs. 11.22 cr. / Rs. 0.001 cr (FY14), Rs. 18.41 cr. / Rs. 0.01 cr. (FY15) and Rs. 19.30 cr. / Rs. 0.01 cr. (FY16). For the first 11 months of the current fiscal it has posted net profit of Rs. 0.49 cr. on a turnover of Rs. 20.63 cr. Thus it has marked sudden jump in the bottom line for this fiscal. If we annualize the latest earnings and attribute to the fully diluted equity post issue, then asking price is at a P/E of around 25 plus and at a P/BV of 1.48. Thus issue is fully priced. It has no listed peers to compare with.

On merchant banker’s front, this is 29th mandate so far and in last 10 issues listed recently, two issues opened at a discount to offer price.

Conclusion: As the issue is fully priced, risk savvy cash surplus investors may consider investment for long term.


Conclusion / Investment Strategy

As the issue is fully priced, risk savvy cash surplus investors may consider investment for long term.

Review By Dilip Davda on May 11, 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

Bhakti Gems and Jewellery IPO FAQs

  1. 1. Why Bhakti Gems and Jewellery IPO?

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

  2. 2. How is Bhakti Gems and Jewellery IPO?

    Read the Bhakti Gems and Jewellery IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Bhakti Gems and Jewellery IPO what should investors do?

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

  4. 4. Is Bhakti Gems and Jewellery IPO good?

    Sorry, we didn't rate the Bhakti Gems and Jewellery IPO.

  5. 5. Is Bhakti Gems and Jewellery IPO worth Investing?

    Our lead analyst Mr. Dilip Davda didn't rate the Bhakti Gems and Jewellery IPO.

  6. 6. When will Bhakti Gems and Jewellery IPO allotment status?

    The Bhakti Gems and Jewellery IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Bhakti Gems and Jewellery IPO allotment status to check.

  7. 7. When will Bhakti Gems and Jewellery IPO list?

    The Bhakti Gems and Jewellery IPO will list on Tuesday, May 30, 2017, at BSE SME.








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