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Creative Peripherals & Distribution NSE SME IPO review (Avoid)

Review By Dilip Davda on Mar 21, 2017

Creative Peripherals & Distribution Ltd (CPDL) is is engaged in providing distribution services of both volume business and value business products. It has partnered with a number of renowned brands for distribution in the country such as Rapoo Technologies Limited, Lino Manfrotto + Co S.p.a, Transcend Information Inc, ViewSonic International Corporation, Olympus Corporation, Belkin Inc, Zioncom (Hong Kong) Technology Limited, Apple India Private Limited, Sennheiser Electronics India Private Limited, Gopro Cooperatief U.A, TPV Technology India Private Limited, Printronix, SIEPL India Electronics Private Limited, Vintron Infronatics Limited and Samsung India Electronics Private Limited specialising in IT, Lifestyle, Imaging and telecom products. CPDL is a broad based distribution model which is based on multiple products and multiple brand strategy. The focus is to capture a considerable market share in each of the product categories that will help in its offerings to channel partners and also spread its market risks arising out of fluctuations in the market share of various brands besides helping it to achieve economies of scale.

To part finance its working capital and general corpus fund needs, the company is coming out with a maiden IPO of 1800000 equity share of Rs. 10 each via book building route with a price band of Rs. 71-75 to mobilize Rs. 12.78 to Rs. 13.50 crore (based on lower and upper price bands). Issue opens for subscription on 29.03.17 and will close on 03.04.17. Minimum application is to be made for 1600 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Pantomath Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. From inception till March 2016 it issued all equity at par and then a bonus in the ratio of 1 for 1 in January 2017. Post issue it’s paid up equity capital will stand enhanced from Rs. 4.00 crore to Rs. 5.80 crore.

On performance front, the company has posted turnover/net profits of Rs. 126.61 cr. / Rs. 0.90cr. (FY13), Rs. 140.15 cr. /Rs. 1.59 cr. (FY14), Rs. 184.62 cr. /Rs. 0.76 cr. (FY15) and Rs. 198.79 cr. / Rs. 0.67 cr. (FY16). For first half of the current fiscal it has earned net profit of Rs. 0.46 cr. on a turnover of Rs. 91.02 cr. If we annualize latest earnings and attribute it to fully diluted equity post issue then asking price is at a P/E of around 46 plus and P/BV of 5 plus. Thus it is aggressively priced against peers trading at around 23 P/E as per prospectus details.

On merchant banker’s front, this is the 41st mandate from its stable and past mandates have shown mixed trends. However, last 10 issues have shown positive trends on listing dates.

Conclusion: Although top line shows growth, bottom line has declining trends. Issue is priced very aggressively, there is no harm giving it a miss.


Conclusion / Investment Strategy

Although top line shows growth, bottom line has declining trends. Issue is priced very aggressively, there is no harm giving it a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Mar 21, 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. 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

Creative Peripherals Distribution IPO FAQs

  1. 1. Why Creative Peripherals Distribution IPO?

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

  2. 2. How is Creative Peripherals Distribution IPO?

    Read the Creative Peripherals Distribution IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Creative Peripherals Distribution IPO what should investors do?

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

  4. 4. Is Creative Peripherals Distribution IPO good?

    Our recommendation for Creative Peripherals Distribution IPO is to avoid.

  5. 5. Is Creative Peripherals Distribution IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Creative Peripherals Distribution IPO.

  6. 6. When will Creative Peripherals Distribution IPO allotment status?

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

  7. 7. When will Creative Peripherals Distribution IPO list?

    The Creative Peripherals Distribution IPO will list on Wednesday, April 12, 2017, at NSE SME.