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D P Wires NSE SME IPO review (Apply)

Review By Dilip Davda on Sep 12, 2017

D P Wires Ltd. (DPW) is engaged in manufacturing and supply of Steel wires, plastic pipes and plastic films which find its application in industries like oil & gas, power, environment, civil, energy, automobile, infrastructure etc. All its manufacturing divisions are situated in a single premise at Industrial Estate, Ratlam. In the year 2001-02, DPW started commercial production of wire drawing of high carbon, low carbon & alloy steel, polyethene and polyethene layflat tubing. In year 2003-04 it started production of LRPC Strands used in bridges, flyovers etc. Later on DPW kept on introducing new products on the basis of demand based on its production capacity. The company is also engaged in power generation through 2 wind farms of 0.80 MW each in village Okha-Madhi and Jodhpur in District Jamnagar. It has entered into PPA with Gujarat Urja Vikas Nigam Limited for sale of electricity generated through these wind farms for a period of 20 years.

DPW is continuously serving top companies like Hindalco Industries Ltd (Aditya Birla group), Reliance Industries Ltd., APCO Infratech Ltd. and some of the leaders in the engineering and construction industry like Gannon Dunkerley & Co. Ltd., Larsen & Toubro Ltd., Navyuga Engg Co. Ltd., U.P. State Bridge Corporation Ltd., MM Auto Industries Ltd., Simplex Infrastructures Limited, Reliance Infrastructure Limited, Vascon Engineers Limited, Coventry Coit-O-Matic (Hr) Ltd. and many more.

To part finance its working capital and general corpus fund needs, DPW is coming out with a maiden IPO of 3584000 equity share of Rs. 10 each at a fixed price of Rs. 75 per share to mobilize Rs. 26.88 crore. Issue opens for subscription on 21.09.17 and will close on 26.09.17. Minimum application is to be made for 1600 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The offer will constitute 26.42% of the post offer paid up equity share capital of the company. Issue is solely lead managed by Sarthi Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Having raised initial equity at par, it raised further equity in a price range of Rs.20 Rs. 100 per share between March 2001 and October 2010. It issued bonus shares in the ratio of 3 shares for every 1 share held in April 2017. Post issue, its current paid up equity capital of Rs. 9.98 crore will stand enhanced to Rs. 13.57 crore.

On performance front, SKML has posted turnover/net profits of Rs. 93.62 cr. / Rs. 1.25 cr. (FY14), Rs. 139.13 cr. / Rs. 1.67 cr. (FY15), Rs. 160.06 cr. / Rs. 2.19 cr. (FY16) and Rs. 196.83 cr. / Rs. 5.00 cr. (FY17). If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 20 plus (against Industry’s composite P/E of around 40). Last three year’s average EPS is 3.45 and average RoNW is 13.23. Issue is priced at a P/BV of 2.69.

On merchant banker’s front, this is the 32nd mandate from its stable so far. Out of last 10 listings, 2 issues opened at a discount, 1 at par and the rest with a premium ranging from 3 to 131 per cent ( Main board IPO of Salasar gave over 131% return) on the day of listing.

Conclusion: Investment for short to long term may be considered.


Conclusion / Investment Strategy

Investment for short to long term may be considered.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Sep 12, 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

D P Wires IPO FAQs

  1. 1. Why D P Wires IPO?

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

  2. 2. How is D P Wires IPO?

    Read the D P Wires IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. D P Wires IPO what should investors do?

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

  4. 4. Is D P Wires IPO good?

    Our recommendation for D P Wires IPO is to subscribe.

  5. 5. Is D P Wires IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the D P Wires IPO.

  6. 6. When will D P Wires IPO allotment status?

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

  7. 7. When will D P Wires IPO list?

    The D P Wires IPO will list on Thursday, October 5, 2017, at NSE SME.

1 Comments

1. TOPS  Sep 20, 2017 5:40:18 PM
DILIP SIR,
PLEASE CLARIFY WHETHER FINANCIAL PERFORMANCE MENTIONED BY YOU IS FOR DP WIRES OR SKML ??