Diggi Multitrade BSE SME IPO review (Avoid)

Review By Dilip Davda on Dec 7, 2017

Diggi Multitrade Ltd. (DML) – (erstwhile known as Diggi Securities Pvt. Ltd.) was initially engaged in securities trading in stock markets. In 2013-14 it forayed into trading of fabrics, real estate, allied activities and construction material and changed its name.

To part finance its incremental working capital and general corpus fund needs DML is coming out with a maiden IPO of 2600000 equity shares of Rs. 10 each at a fixed price of Rs. 13 per share to mobilize Rs. 3.38 crore. Issue opens for subscription on 11.12.17 and will close on 14.12.17. Minimum application is to be made for 10000 shares and in multiples thereon, thereafter. Post allotment shares will be listed on BSE SME. Issue is solely lead managed by Gretex Corporate Services Pvt Ltd and Purva Sharegistry (India) Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.87% of the post issue paid up capital of the company. The average cost of acquisition of shares by the promoters is Rs. 10. It has issued entire equity at par so far. Post issue, its current paid up equity capital of Rs. 7.08 crore will stand enhanced to Rs. 9.68 crore.

On performance front, DML has posted turnover/net profits of Rs. 0.60 cr. / Rs. 0.02 cr. (FY14), Rs. 2.07 cr. / Rs.0.03 cr. (FY15), Rs. 1.00 cr./ Rs. – (0.03) cr. (FY16) and Rs. 1.88 cr. / Rs. 0.06 cr. (FY17). Surprisingly, for the first half of current fiscal it has earned net profit of Rs. 0.24 cr. on a turnover of Rs. 1.83 cr. Issue is priced at a P/BV of 1.24 and 1.17 on the basis of its NAV as on 30.09.17 as well as post issue. For last three fiscals it has posted an average EPS of Rs.0.05 and average RoNW of 0.39%. If we annualize latest earnings and attribute on fully diluted equity post issue, then asking price is at a P/E of 26 thus issue is aggressively priced. It has not listed peers to compare with.

On merchant banker's front, this is the 9th mandate from its stable in past three years. Out of last 8 listings 3 opened at discount, 4 at par and 1 with just 0.40% premium to offer price on the day of listings. Thus it has poor track record.


Conclusion / Investment Strategy

There is no harm in giving this highly priced issue a miss. (Avoid). The asking price is at a P/E of 26 thus issue is aggressively priced.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Dec 7, 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

Diggi Multitrade IPO FAQs

  1. 1. Why Diggi Multitrade IPO?

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

  2. 2. How is Diggi Multitrade IPO?

    Read the Diggi Multitrade IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Diggi Multitrade IPO what should investors do?

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

  4. 4. Is Diggi Multitrade IPO good?

    Our recommendation for Diggi Multitrade IPO is to avoid.

  5. 5. Is Diggi Multitrade IPO worth Investing?

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

  6. 6. When will Diggi Multitrade IPO allotment status?

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

  7. 7. When will Diggi Multitrade IPO list?

    The Diggi Multitrade IPO will list on Friday, December 22, 2017, at BSE SME.








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