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Bhanderi Infracon Ltd IPO Review (Avoid)

Review By Dilip Davda on Jul 18, 2014

 

Bhanderi Infracon Limited is a Real Estate Development Company, engaged in buying, selling, development, re-development of properties, investments in joint ventures, investment in partnerships, investment in completed / partially completed / upcoming projects etc. Currently, the company is engaged in development of Residential Flats and Bungalows under Partnership firms, namely: Tulsi Enterprises and Dharnidhar Developers respectively.

 

 

 

To raise its working capital requirements and general corpus fund, the company is coming out with an issue of 540000 equity share of Rs. 10 each at a price of Rs. 120 per share to raise Rs. 6.48 crore. Issue opens for subscription on 22.07.14 and will close on 25.07.14. Minimum application is to be made for 1200 shares and in multiples thereof, thereon. Issue is lead managed by Choice Capital Advisors Pvt. Ltd and Purva Sharegistry (India) Pvt Ltd is the registrar to the issue. Post allotment shares will be listed on BSE SME.

 

 

 

On company’s performance front, it has posted an average EPS of Rs. 0.51 for last three fiscal. For 10 months ended on 31.01.14 it has earned net profit of Rs. Rs. 0.13 crore on a turnover of Rs. 1.06 crore. If we attribute this earnings on expanded equity of Rs. 2.02 crore post IPO than it gives EPS of Rs. 0.79 giving P/E of 151 plus and based on its book value of Rs. 42 on the said date, it is at a P/BV of around 3. Thus issue is exorbitantly priced. In March 2013, the company issued bonus shares in the ratio of 104 for 1. In September 2013, it made preferential issued of 389100 shares at a price of Rs. 125 per share to promoters that helped it to post book value of Rs. 42.

 

 

 

On merchant banker’s front, this is the third mandate of SME IPO from Choice Capital and has poor track record for earlier two issues.


Conclusion / Investment Strategy

Remark: Just Avoid this costly issue.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Jul 18, 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

Bhanderi Infracon IPO FAQs

  1. 1. Why Bhanderi Infracon IPO?

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

  2. 2. How is Bhanderi Infracon IPO?

    Read the Bhanderi Infracon IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Bhanderi Infracon IPO what should investors do?

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

  4. 4. Is Bhanderi Infracon IPO good?

    Our recommendation for Bhanderi Infracon IPO is to avoid.

  5. 5. Is Bhanderi Infracon IPO worth Investing?

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

  6. 6. When will Bhanderi Infracon IPO allotment status?

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

  7. 7. When will Bhanderi Infracon IPO list?

    The Bhanderi Infracon IPO will list on Friday, August 8, 2014, at BSE SME.