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Bothra Metals and Alloys Ltd IPO Review (Avoid)

Review By Dilip Davda on Mar 8, 2013

Bothra Metals & Alloys Ltd. (BMAL) -deals in wide range of the Aluminum Product that caters the customer throughout the globe. It is engaged in Aluminum products such as Extrusions, Ladder Section, Billets, Profile, Section and Electronic Extrusion, Ingots, Shots, Alloys Ingots that meet stringent quality norm's at the most competitive prices with constant product enhancements along with utmost commitment towards quality control and customer service. BMAL's facilities are located at Himachal Pradesh (kala-amb), Gujarat (Bhavnagar), and Maharashtra (Sangli) with modern and latest machinery. It has in house foundry with modern melting furnace including fully automatic hot top casting technology. To raise working capital and general corpus funds, the company is coming out with a fixed price IPO of 4884000 equity shares of Rs. 10 each at a price of Rs. 25 per share (including offer for sale of 2292000 equity shares). Issue opens for subscription on 12th March and will close on 14th March 2013. Minimum application is to be made for 6000 shares and in multiples thereof thereafter. Post allotment the shares will be listed no BSE SME. Issue is lead managed by Sarthi Capital Advisors Pvt. Ltd. and Sharex Dynamic India Pvt. Ltd is the registrar to the issue. Between 2007 & 2011 the company made preferential allotment of shares in the price range of Rs. 20 to Rs. 70 per share and has also issued bonus in the ratio of 4 for 1 in October 2010 and 1 for 1 in July 2011.

On company's performance front, it has posted an average EPS of Rs. 2.35 for last three fiscals with inconsistent bottom line and NAV is Rs. 13.08 as at 31.3.2012.  For six months ended 30.09.12 it has posted an EPS of Rs. 3.53 on an equity base of Rs. 15.91 crore. Post issue equity will rise to Rs. 18.51 crore translating into an EPS of Rs.3.03 for the said earnings resulting into P/E of 8 plus making it a costly bet compared to its peer's trading around 4 to 5 P/E.

Perhaps this is the first mandate for the Lead manager as no track record is available for past mandates.


Conclusion / Investment Strategy

Considering the fate of SME IPOs post listing, despite market making, skipping of this issue is advisable.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Mar 8, 2013

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

Bothra Metals and Alloys IPO FAQs

  1. 1. Why Bothra Metals and Alloys IPO?

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

  2. 2. How is Bothra Metals and Alloys IPO?

    Read the Bothra Metals and Alloys IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Bothra Metals and Alloys IPO what should investors do?

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

  4. 4. Is Bothra Metals and Alloys IPO good?

    Our recommendation for Bothra Metals and Alloys IPO is to avoid.

  5. 5. Is Bothra Metals and Alloys IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Bothra Metals and Alloys IPO.

  6. 6. When will Bothra Metals and Alloys IPO allotment status?

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

  7. 7. When will Bothra Metals and Alloys IPO list?

    The Bothra Metals and Alloys IPO will list on Monday, March 25, 2013, at BSE SME.