CKP Leisure NSE SME IPO Review (Apply at your own risk)

Review By Dilip Davda on Feb 14, 2018

CKP Leisure Ltd. (CKPL) is focusing on the fast growing niche leisure market in India comprising of night clubs, fine dining restaurants, banquet halls, etc. Currently it operates one of the well known night club’s in Mumbai in the iconic Hotel Sahara Star. Company focuses on providing guests a premium night club experience with quality food and beverages and service in a modern ambience. CKPL launched a nightclub in the city on July 27th, 2016, by the name “SIRKUS”. The high-end nightclub “SIRKUS” boasts of a plush décor and electrifying ambience. It provides the guests with an unparalleled outdoor nightlife experience. Being located at the iconic Hotel Sahara Star (Mumbai), the space spans 5,000 square feet and offers a dance floor, high-energy lighting, VIP bottle service and some of the best beats and entertainment. Club SIRKUS is open on Wednesday, Thursday, Friday and Saturday nights from 10:00 p.m. to close. The club requires its guests to follow a dress code which adds on to the glamour and nightlife experience.

The club earns income in different forms such as entry charge, private party income, table sales, sale of food/beverages and sale of liquor and wines. The theme of the club is to cater to those who are in reasonably well paying jobs with a decent disposable income. Music is the key draw factor for almost all the clientele. The style and content of the music cuts across age and economic barriers, and forms a common bond of fellowship among the regulars. CKPL took over the operations and management of a restaurant and a night club named ‘Saizen’ and ‘Club Athena’ at Colaba in Mumbai during 2015 and changed its name to “Ja-pani” and “Club Alibii”.

To part finance setting up of a Banquet at Nashik (at Pinnacle Mall)  and general corpus fund needs, CKPL is coming out with a maiden IPO of 3848000 equity shares of Rs.10 each (consisting 1248000 fresh shares and 2600000 shares by way of offer for sell) at a fixed price of Rs. 30 per share to mobilize Rs. 11.54 crore. Issue opens for subscription on 21.02.18 and will close on 23.02.18. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Aryaman Financial Services Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 39.94% of the post issue paid up capital of the company. Average cost of acquisition of shares by the promoters is Rs.13.36 and Rs. 18.57 per share. Having issued initial equity at par, it raised further equity at a price of Rs. 30 per share. Post issue CKPL’s current paid up equity capital of Rs. 8.39 cr. will stand enhanced to Rs. 9.63 cr.

On performance front, it has posted turnover/net profits of Rs.1.16 cr. / Rs. 1.07 cr. (FY16), Rs. 10.83 cr. / Rs. 1.65 cr. (FY17). For first eight months of the current fiscal, it has earned net profit of Rs. 0.94 cr. on a turnover of Rs. 6.87 cr. Thus sudden jump in FY 17 in top and bottom lines are surprising. For last three fiscals it has posted an average EPS of Rs. 2.54 and an average RoNW of 12.31% on an equity base of Rs. 7.59 cr.  Issue is priced at a P/BV of 1.47 on the basis of its NAV of Rs. 20.34 per share as on 30.11.17 and at a P/BV of 1.35 on the basis of post issue NAV of Rs. 22.26 per share. If we annualize latest earnings and attribute it on fully diluted post issue equity then asking price is at a P/E of around 20, making it fully priced issue. It has no listed peers to compare with. Hospitality industry composite P/E is around 28.

On merchant banker’s front, this is the 27th mandate from its stable and out of last 10 listings (as per offer documents) 3 opened at discount, 2 at par and the rest with a premium ranging from 2% to 73%. (73% premium was marked by the only recent main board IPO of Apollo Micro).


Conclusion / Investment Strategy

Based on its performance issue appears fully priced. Cash surplus risk savvy investors may consider investment for long term. (Subscribe at your own risk).

Review By Dilip Davda on Feb 14, 2018

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

CKP Leisure IPO FAQs

  1. 1. Why CKP Leisure IPO?

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

  2. 2. How is CKP Leisure IPO?

    Read the CKP Leisure IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. CKP Leisure IPO what should investors do?

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

  4. 4. Is CKP Leisure IPO good?

    Sorry, we didn't rate the CKP Leisure IPO.

  5. 5. Is CKP Leisure IPO worth Investing?

    Our lead analyst Mr. Dilip Davda didn't rate the CKP Leisure IPO.

  6. 6. When will CKP Leisure IPO allotment status?

    The CKP Leisure IPO allotment status will be available on or around Feb 28, 2018. The allotted shares will be credited in demat account by Mar 5, 2018. Visit CKP Leisure IPO allotment status to check.

  7. 7. When will CKP Leisure IPO list?

    The CKP Leisure IPO will list on Tuesday, March 6, 2018, at NSE SME.








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