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C L Educate IPO review (Apply)

Review By Dilip Davda on Mar 14, 2017

CL Educate Ltd (CLE) is a diversified and integrated technology-enabled provider of education products, services, content and infrastructure, with a presence across the education value chain. It has diversified its operations across six business segments, spanning the education value chain

  1. Test preparation and training services, generally referred to as 'test prep', conducted under our well recognized brand Career Launcher;
  2. Publishing and content development, conducted under our brand GK Publications;
  3. Integrated business, marketing and sales services for corporate, conducted under our brand Kestone, including event management, marketing support (including digital marketing support), customer engagement, managed manpower and training services;
  4. Vocational training programs implemented by us under Government schemes in various States across India;
  5. Integrated solutions to educational institutions and universities including business advisory and outreach support services under its brand CL Media as well as research incubation and support services conducted under the brand Accendere; and
  6. K-12 schools operated under our brand Indus World Schools.

To part finance its needs for pre-payment of debt, working capital, general corpus fund and strategic acquisition plan, the company is coming out with a maiden IPO of 2180119 equity share of Rs. 10 each as well as offer for sale of 2579881 shares. The issue is via book building route with a price band of Rs. 500-502 per share. Total issue is for 4760000 shares to mobilize approx Rs. 238.95 crore (based on higher price band). 1666000 shares are reserved for retail category of investors. Issue opens for subscription on 20.03.17 and will close on 22.03.17. Minimum application is to be made for 29 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. Being issue under Rs. 250 crore, it will be listed in 'T' group initially that may keep speculators away. From May 1996 to Oct. 2000 it issued initial equity at par and also a bonus in the ratio of 17 for 2 in August 2000. From June 2001 to October 2016 it issued fresh equity in a price range of Rs. 150 to Rs. 1000 (for a fv of Rs. 10) and bonus issues in the ratio of 6 for 1 (Sept 2004) and 1 for 2 (Feb 2007). Post issue its current paid up equity capital of Rs.11.98 crore will stand enhanced to Rs. 14.16 cr. Kotak Mahindra Capital Co. Ltd is the sole BRLM and Karvy Computershare Pvt Ltd is the registrar to the issue.

On the performance front, the company has (on a consolidated basis) posted turnover/net profits of Rs. 222.08 cr. / Rs. 14.57 cr. (FY13), Rs. 229.81 cr. / Rs. 15.34 cr. (FY14), Rs. 285.08 cr. / Rs. 21.23 cr. (FY15) and Rs. 296.69 cr. / Rs. 21.687 cr. (FY16). For first half of the current fiscal ended on 30.09.16 it has earned net profit of Rs. 12.92 crore on a turnover of Rs. 160.70 cr. Management is confident of maintaining the tempo of growth with more innovative plans. If we annualize latest earnings and attribute on fully diluted equity post issue, then asking price is at a P/E of around 27 plus (against industry composite of 53 plus as on 31.03.16) and at a P/BV of around 2.3. Thus issue is reasonable priced. However, peers are not having the same business model to compare with.

On BRLM’s front, it has handled 19 issues in past three years out of which 5 issues closed below the issue price on listing date.

Conclusion: Education sector is attracting fancy off late and hence, investors may consider investment for medium to long term.


Conclusion / Investment Strategy

Education sector is attracting fancy off late and hence, investors may consider investment for medium to long term.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Mar 14, 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. Any reader taking decisions based on any information published here does so entirely at its own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

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

CL Educate IPO FAQs

  1. 1. Why CL Educate IPO?

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

  2. 2. How is CL Educate IPO?

    Read the CL Educate IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. CL Educate IPO what should investors do?

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

  4. 4. Is CL Educate IPO good?

    Our recommendation for CL Educate IPO is to subscribe.

  5. 5. Is CL Educate IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the CL Educate IPO.

  6. 6. When will CL Educate IPO allotment status?

    The CL Educate IPO allotment status will be available on or around Mar 29, 2017. The allotted shares will be credited in demat account by Mar 30, 2017. Visit CL Educate IPO allotment status to check.

  7. 7. When will CL Educate IPO list?

    The CL Educate IPO will list on Friday, March 31, 2017, at BSE, NSE.

4 Comments

4. Kousik  Apr 12, 2017 5:29:49 PM
Do go by Dilip , he is totally nonsense analyst . I can remember he asked no to prefer manpasand IPO. Dilip idiot may be a paid analyst .
3. Kumar  Apr 2, 2017 12:50:31 AM
Dear Dilip ji,

Based on the review published by you on ''cl educate'', I have applied n got allotted '' cl educate'' shares. It got listed yesterday n closed 16% lower to its issue price. As a small investor, I lost money in this issue. Pls. Do not recommend these kind of issues in future. I am having lot of faith n importance on ur comments on IPO. Pls. Do not lose same from us on u sir.

Regards,

Kumar,
Hyderabad
3.1. Arun Mahadev Nanavare  Apr 11, 2017 12:01:18 AM
have a little patience brother
3.2. Kousik  Apr 12, 2017 5:32:17 PM
Dilip is a nonsense analyst may be a paid analysts.
2. Angel Savaliya  Mar 22, 2017 5:31:06 PM
Hello Sir,

I am a Retail Investor and i don''t know that should i fill the CL Educate IPO Form Or Not??Regarding This IPO The Agent Review is very bed and today is the last date for the IPO submission. So Please Suggest Me What Should I Do??
1. vISHAL  Mar 21, 2017 5:49:01 PM
Dilip Sir, Your views are very good. I do read always. Thanks