Captain Pipes Ltd IPO Review (Avoid)

Review By Dilip Davda on Nov 18, 2014

 

One more SME IPO is opening in the last week of November 2014 for BSE SME listing. Details of the same are as under: 

 

Captain Pipes Ltd. (CPL), manufactures a wide range of high tensile and high impact uPVC threaded Column Pipes, uPVC Plumbing Pipes, uPVC Pressure Pipes, uPVC Casing Pipes, uPVC Plumbing Fittings and uPVC Agri Fittings. CPL is also a supplier of HDPE Pipes (being procured from Captain Polyplast Limited, the Promoter Company which manufactures the same on job work basis) and uPVC Column Pipes Fittings being procured from identified manufacturer as per specifications. It assembles the procured uPVC Column Pipes with accessories and supplies the assembled products to uPVC threaded Column Pipes customers. Companies products are widely used by agriculture and construction sector consumers. Its installed capacity is 17,700MT per annum. 

 

To meet is fund requirement and repayment of loan, the company is issuing 1101000 equity share of Rs. 10 each at a fixed price of Rs. 40 per share to mobilize Rs. 4.40 crore. Issue opens for subscription on 26.11.14 and will close on 01.12.14. Minimum application is to be made for 3000 shares and in multiples thereof, thereafter. Issue is lead managed by Hem Securities Ltd. Sharepro Services (India) Pvt Ltd is the registrar to the issue. Post allotment shares will be listed on BSE SME. Its current equity of Rs. 3.06 crore post bonus issue in the ratio of 1 for 1 in September 2014 will rise to Rs. 4.16 crore post this IPO. 

 

On performance front, the company has posted an average EPS of Rs. (0.79) i.e. it has incurred losses. For the first half of the current fiscal it has earned net profit of Rs. 0.34 crore on a turnover of Rs. 15.37 crore. If we attribute these earnings on fully diluted equity post of Rs. 4.16 crore post IPO, the asking price is at a P/E of 24 plus making it a costly bet. 

 

On merchant banker’s front, this is 12th mandate from it. In earlier 11 mandates, we have witnessed returns on investment for nine mandates. This indicates at better market making by this merchant banker.


Conclusion / Investment Strategy

 

Considering the barriers on minimum investment and low preference by major broking community, only risks aver high net-worth individuals may park their surplus funds in this costly bet at their own discretion.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Nov 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

Captain Pipes IPO FAQs

  1. 1. Why Captain Pipes IPO?

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

  2. 2. How is Captain Pipes IPO?

    Read the Captain Pipes IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Captain Pipes IPO what should investors do?

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

  4. 4. Is Captain Pipes IPO good?

    Our recommendation for Captain Pipes IPO is to avoid.

  5. 5. Is Captain Pipes IPO worth Investing?

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

  6. 6. When will Captain Pipes IPO allotment status?

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

  7. 7. When will Captain Pipes IPO list?

    The Captain Pipes IPO will list on Thursday, December 11, 2014, at BSE SME.








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