Dhanuka Realty NSE SME IPO review (Avoid)

Review By Dilip Davda on Sep 28, 2016

Dhanuka Realty Ltd (DRL) is a real estate development and construction company primarily focusing on development of residential apartments in Jaipur. It has been successful in completing its first residential project, “Sunshine Orchid” comprising of 16 residential flats of 2 BHK with total sq. ft built up area of 20253.18 Sq Ft in the year 2010. The company also undertakes construction contracts from its Group Companies for development of residential projects. As on the date of prospectus, DRL has successfully completed construction of two residential projects namely Sunshine Shalimar and Sunshine Krishna 3, and currently have two ongoing projects. Presently, DRL subcontracts all construction and execution work to third party contractors. As and when it receives a contract, it initiates the process of finalizing the subcontractor for execution of the same. DRL carry overall supervision of construction work on the site including quality control, site management, work scheduling, bar charting, construction time lining etc. and overall progress of work is managed and supervised by DRL. The Company has a Subsidiary Company namely Triveni Kripa Buildhome Private Limited, which has recently been acquired by it from promoters with a view to expand our business.

To meet working capital and general corpus funds requirement, the company is coming out with a maiden IPO of 1056000 equity share of Rs. 10 each at a fixed price of Rs. 40 per share to mobilize Rs. 4.22 crore. Issue opens for subscription on 30.09.16 and will close on 06.10.16. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Issue is lead managed by Hem Securities Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on NSE SME Emerge platform. Having raised equity at par on MoA subscription, it issued further equity at a price of Rs. 150 per share in December 20008 and then issued bonus in the ratio of 19 for 1 in May 2016. It further raised equity at a price of Rs. 16.18 in July 2016. Post issue, its current paid up equity capital of Rs. 2.46 crore will stand enhanced to Rs. 3.52 crore.

On performance front, the company has posted turnover/net profit of Rs. 1.70 cr. / Rs. 0.04 cr. (FY13), Rs. 7.60 cr. / Rs. 0.10 cr. (FY14), Rs. 13.46 cr. / Rs. 0.19 cr. (FY15) and 17.31 cr. / Rs. 0.57 cr. (FY16). Thus it has shown steady progress in top and bottom lines. If we attribute latest earnings on fully diluted equity post IPO then asking price is at a P/E of 24 plus against industry composite of 25 thus issue appears to be fully priced.

On merchant banker’s front, this is 21st mandate from its stable and past mandates have shown mixed trends.

Conclusion: As the issue is fully priced, long term investors with surplus funds may consider investment, other may ignore.


Conclusion / Investment Strategy

As the issue is fully priced, long term investors with surplus funds may consider investment, other may ignore.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Sep 28, 2016

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

Dhanuka Realty IPO FAQs

  1. 1. Why Dhanuka Realty IPO?

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

  2. 2. How is Dhanuka Realty IPO?

    Read the Dhanuka Realty IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Dhanuka Realty IPO what should investors do?

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

  4. 4. Is Dhanuka Realty IPO good?

    Our recommendation for Dhanuka Realty IPO is to avoid.

  5. 5. Is Dhanuka Realty IPO worth Investing?

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

  6. 6. When will Dhanuka Realty IPO allotment status?

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

  7. 7. When will Dhanuka Realty IPO list?

    The Dhanuka Realty IPO will list on Tuesday, October 18, 2016, at NSE SME.








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