FREE Account Opening + No Clearing Fees

CWD Ltd. BSE Startup IPO review (Avoid)

Review By Dilip Davda on September 29, 2021

•    CWD stands for Connected Wireless Devices. 
•    On a standalone basis, it has poor financial data. 
•    The issue is priced very aggressively against its scale of operations.
•    There is no harm in skipping this highly-priced issue. 

Though the company's IPO announcement was done three days before, its offer documents (despite being filed on September 25, 2021) were not traceable on any web till this morning (i.e. till 10.30 am of September 29, 2021. Finally, it was uploaded by the designated exchange after 11.00 hrs of 29.09.21. This indicates the behaviour of the concerned parties to it. What's more, till the time of writing this review (i.e. around 14.10 hrs of 29.09.21) company's website did not create an "Investors" page, so what kind of service one can expect from this company. 

CWD Ltd. (CWD) is an Information and Communication Technology (ICT) based company that designs, develops, manufactures, and sells integrated solutions combining the power of software and electronics. All products that are designed and developed in the company are focused on wireless technologies either on short-range radio technology like NFC, Bluetooth BLE, WiFi, Zigbee; mid-range systems like LORA or long-range communication systems like 5G LTE, NB-IoT, LTE CAT M1 etc.

CWD stands for Connected Wireless Devices. The Company operates mainly through the segments of Consumer Electronics and the Design and Development of Technology Solutions for various Enterprises and Businesses. Its diversified product portfolio includes Smart Medical Consumer Electronics, Products for Vaccine Tracking and Delivery, Tracking devices for Farm Cattle that monitor both movement and health, Electronics for converting Electric Power meter into a Smart Power meter, Employee Safety and Identity Solutions, Electronics that once embedded provide Smart Lighting capabilities to enterprises and consumers reducing their costs, Bluetooth Low Energy Modules that can be used across various white goods and projects etc. The company's comprehensive suite of innovative technology allows it to attract new customers and expand existing customer relationships.

The Company is registered as a start-up with DIPP bearing certificate No. DIPP1963, with a focus to provide innovative, cost-effective, and comprehensive solutions, products with strategic partnerships for best engineering and support and distribution of its products.

To carry out businesses in different locations within India and abroad, it has 3 subsidiaries namely CWD Manufacturing Pvt. Ltd. (CMPL) having its registered office in Mumbai, India, CWD Innovations HK Limited ICIHKL) having its registered office in Hong Kong and SDG Global Private Limited (SGPL) having its registered office in Mumbai, India. As of the date of filing this offer documents, it had a total of 17 employees on roll including key management personnel. 

It is a fully integrated end-to-end integrated solution provider and original equipment manufacturers (OEMs) with capabilities ranging from global sourcing, manufacturing, quality testing, packaging, and logistics.

To part finance its needs for a security deposit for the acquisition of registered office (Rs. 2.00 cr.), working capital (Rs. 9.30 cr.) and general corporate purpose (Rs. 3.53 cr.), CWD is coming out with a maiden IPO of 1000800 equity shares of Rs. 10 each at a fixed price of Rs. 180 per share to mobilize Rs. 18.01 cr. The issue comprises 850800 fresh equity share issue (Rs. 15.31 cr.) and 150000 shares (Rs. 2.70 cr.) by way of offer for sale (OFS). The issue opens for subscription on September 30, 2021, and will close on October 05, 2021. Minimum application is to be made for 800 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE Startup. The issue constitutes 27.71% of the post issue paid-up capital of the company. CWS will spend around Rs. 0.50 cr. (including Rs. 0.48 cr. for fresh equity issue of Rs. 15.31 cr.) for this IPO process. 

The issue is solely lead managed by Aryaman Financial Services Ltd. and KFin Technologies Pvt. Ltd. is the registrar to the issue. Aryaman Capital Markets Ltd. is the market maker for this company. 

Having issued initial equity at par, CWD issued rights shares at Rs. 10 and Rs. 77 per share between January 2020 and April 2020. It has also issued bonus shares in the ratio of 328 shares for every 100 shares in October 2020. The average cost of acquisition of shares by the promoters is Rs. 2.34 and Rs. 17.75 per share. 

Post issue, CWD's current paid-up equity capital of Rs. 2.76 cr. (2760600 shares) will stand enhanced to Rs. 3.61 cr. (3611400 shares). Based on the IPO pricing, the company is looking for a market cap of Rs. 65.01 cr. 

On the financial performance front, for the last two fiscals, CWD has (on a consolidated basis) posted revenue/net profit (Loss) of Rs. 3.03 cr. / Rs. 0.51 cr. (FY20) and Rs. 3.41 cr. / Rs. 1.42 cr. (FY21). As of March 31, 2021, its paid-up equity capital of Rs. 2.76 cr. had a negative reserve of Rs. - (1.16) cr. 

For the last two fiscals, the company has (on a standalone basis) posted an average EPS of Rs. - (15.58) and an average RoNW of 46.90% while on a consolidated basis it has posted an average EPS of Rs.11.28 and an average RoNW of 32.74% for the last two fiscals. 

The issue is priced at a P/BV of 30.98 based on its NAV of Rs. 5.81 as of March 31, 2021, and at a P/BV of 3.84 based on its post-issue NAV of Rs. 46.85 (on a consolidated basis). 

If we attribute its consolidated FY21 earnings on fully diluted equity post issue, then the asking price is at a P/E of around 45.80 making it an aggressively priced offer. 

As per offer documents, CWD has no listed peers to compare with. 

The company has not paid any dividends since incorporation. It will adopt a prudent dividend policy post listing based on its financial performance and future prospects. 

This is the 15th mandate from Aryaman Financial in the last three fiscals (including the ongoing one). Out of the last 10 listings, 1 opened at discount and the rest with premiums ranging from 0.04% to 2.16% on the day of listings. Thus it has an average track record. 

Conclusion / Investment Strategy

The company is in the field of IT services for connected wireless devices. Its financial data is not in line with its asking price. The issue is aggressively priced based on FY21 consolidated earnings. Small equity base post IPO indicates the longer duration for migration to the mainboard. Investors may skip this highly-priced issue that is asking fancy market cap valuations.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on September 29, 2021

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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. 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 their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.

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.

(Dilip Davda -SEBI registered Research Analyst-Mumbai,

Registration no. INH000003127 (Perpetual)

Email id: ).

CWD Limited IPO FAQs

  1. 1. Why CWD Limited IPO?

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

  2. 2. How is CWD Limited IPO?

    Read the CWD Limited IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. CWD Limited IPO what should investors do?

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

  4. 4. Is CWD Limited IPO good?

    Our recommendation for CWD Limited IPO is to avoid.

  5. 5. Is CWD Limited IPO worth Investing?

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

  6. 6. When will CWD Limited IPO allotment status?

    The CWD Limited IPO allotment status will be available on or around October 8, 2021. The allotted shares will be credited in demat account by October 12, 2021. Visit CWD Limited IPO allotment status to check.

  7. 7. When will CWD Limited IPO list?

    The CWD Limited IPO will list on Wednesday, October 13, 2021, at BSE SME.