Dangee Dums NSE SME IPO review (Apply at your own risk)

Review By Dilip Davda on Aug 13, 2018


•    Company is selling "Dangee Dums’ brand foodies.
•    Premium on equity helped in showing positive net worth.
•    Merchant banker has mixed track record. Last issue of Salebhai stood withdrawn.
•    Issue is fully priced, peers are not strictly comparable.

About Company:
Dangee Dums Ltd. (DDL) (formerly known as Aromen Hospitality Pvt. Ltd.) is converted into public limited company and has changed its name. DDL that was initially established with an aim of running a business of cakes, chocolates, and deserts is currently in the business of chocolates, cakes and pastries and are sold under the brand "Dangee Dums". To expand its product profile, it recently introduces ice creams, Softies, Candies, Cookies, Khari Toast, Artisan Breads, Thick Shakes, Savouries and beverages. With the help of its own R & D, Company keeps adding to its product portfolio new items as per the demands of its customers. Currently it operates with 81 outlets in Gujarat region.

Capital history/Issue details
To part finance repayment of existing secured loans, purchase of fixed assets, meeting general corpus fund etc. ,  DDL is coming out with a maiden IPO of 2712000 equity shares of Rs. 10 each at a fixed price of Rs. 74 per share to mobilize Rs. 20.07 crore. Issue opens for subscription on 20.08.18 and will close on 24.08.18. 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 Monarch Networth Capital Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.42% of the post issue paid up capital of the company.   Having issues initial equity at par, it raised further equity at a fixed rate of Rs. 10 to Rs. 74 per share between January 2016 and July 2017. Average cost of acquisition of shares by the promoters is Rs. 22.82, Rs. 23.24 and Rs. 74.00 per share. Post issue, its current paid up capital of Rs. 7.55 cr. will stand enhanced to Rs. 10.27 cr.

Financial performance:
On performance front, on a standalone basis, DDL has posted turnover/net profits of Rs. 5.98 cr. / Rs. – (2.88 )  cr. (FY15), Rs. 11.53 cr. / Rs. – (5.13)  cr. (FY16), Rs. 19.96 cr. / Rs. 0.90 cr. (FY17) and Rs. 36.58 cr. / Rs. 1.55 cr. (FY18). For last three fiscals, it has posted an average negative EPS of Rs. – (77.53) and negative RoNW. Issue is priced at a P/BV of 4.84 on the basis of its NAV of Rs. 15.30 as on 31.03.18. If we take latest earnings and attribute it to fully diluted equity post issue, then asking price is at a P/E of around 49 against industry composite of 83 P/E.

Peers comparison:
As per offer documents, it has shown Coffee Day, Jubilant Foods and Vidli Restaurant as its listed peers. Any of these peers are not strictly comparable with the model of DDL. These peers are currently trading at a P/Es of around 59, 101 and NA (as on 13.08.18). Thus issue appears fully priced.  

Merchant Banker’s track record:
On merchant banker’s front, this is the 11th mandate from its stable. While last issue of Salebhai Internet stood withdrawn midway due to poor response, our of previous nine listings, 2 opened at discount, 3 at par and the rest with a premiums ranging from 1.42% to 45% on the day of listing.


Conclusion / Investment Strategy

Company’s top line has shown gradual increase with bottom line too marking some improvement. Thanks to hefty premiums kitty that is saving it from negative book value. Based on its spread across Gujarat and the product basket, outlook appears fairly promising.  But being fully priced issue, risk savvy investors may consider investment at their own risk.

Review By Dilip Davda on Aug 13, 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

Dangee Dums IPO FAQs

  1. 1. Why Dangee Dums IPO?

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

  2. 2. How is Dangee Dums IPO?

    Read the Dangee Dums IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Dangee Dums IPO what should investors do?

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

  4. 4. Is Dangee Dums IPO good?

    Sorry, we didn't rate the Dangee Dums IPO.

  5. 5. Is Dangee Dums IPO worth Investing?

    Our lead analyst Mr. Dilip Davda didn't rate the Dangee Dums IPO.

  6. 6. When will Dangee Dums IPO allotment status?

    The Dangee Dums IPO allotment status will be available on or around Aug 29, 2018. The allotted shares will be credited in demat account by Aug 31, 2018. Visit Dangee Dums IPO allotment status to check.

  7. 7. When will Dangee Dums IPO list?

    The Dangee Dums IPO will list on Monday, September 3, 2018, at NSE SME.








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