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Dolfin Rubber BSE SME IPO review (May apply)

Review By Dilip Davda on September 22, 2018

•    Company manufactures tyre tubes and markets under 'Dolfin' brand
•    Top line has been growing consistently, but bottom line marked setback for FY16
•    Based on financial parameters, issue appears fully priced.
•    Growing demands for tubeless tyres may pose big challenge for this segment.

Dolfin Rubber Ltd. (DRL) is engaged in manufacturing of Auto and Animal Driven Vehicle (ADV) tubes supporting the tyre industry near Ludhiana (Punjab). Its range of rubber tubes, suitable for tyres of various types of vehicles viz., Mopeds, Scooters, Motorcycles, Cars, Jeeps, Buses, Trucks and Tractors with the use of Butyl rubber. DRL was incorporated on October 12, 1995 and started journey of manufacturing tubes in the year 1997.

In order to reach to the users, company has established distribution network across India. It has  footsteps in every corner of India through wide network of distributors  in 27 states and union territories in India. Company’s growing distribution network facilitates the efficient sale of its products in targeted markets and promotes its brand visibility. The company markets its products under the brand name 'Dolfin'.

To part finance its working capital and general corpus fund needs, DRL is coming out with a maiden IPO of 2000000 equity shares of Rs. 10 each with a fixed price of Rs. 26 per share. Company mulls mobilizing Rs. 5.20 cr. with this float. Issue opens for subscription on 27.09.18 and will close on 01.10.18. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue constitutes 26.59% of the post issue paid up capital of the company.

Issue is solely lead managed by Guiness Corporate Advisors Pvt. Ltd. while Bigshare Services Pvt. Ltd. is the registrar to the issue. Having issued initial equity at par, it raised further equity at a price of Rs. 20 per share. It has also issued bonus shares in the ratio of 3 for 1 in December 2016. Average cost of acquisition of shares by the promoters is Rs. 2.71 and Rs. 2.83 per share. Post issue, DRL’s current paid up equity capital of Rs. 5.52 cr. will stand enhanced to Rs. 7.52 cr.

On financial performance front, for last four fiscals, DRL has posted turnover/net profits of Rs. 32.55 cr. / Rs. 0.67 cr. (FY15), Rs. 40.92 cr. / Rs. 0.53 cr. (FY16), Rs. 43.09 cr. / Rs. 0.70 cr. (FY17) and Rs. 54.02 cr. / Rs. 1.34 cr. (FY18). It suffered a setback in bottom lines for FY16. For last three fiscals, it has posted an average EPS of Rs. 1.79 and an average RoNW of 14.29%. Issue is priced at a P/BV of 1.91 based on its NAV of Rs. 13.59 as on 31.03.18 and at a P.BV of 1.54 based on post issue NAV of Rs. 16.89. If we consider FY18 earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 15. Thus issue appears fully priced. Arena of tubeless tyres is rising fast and may pose major concern for this industry.

There are no listed peers as per the data given in offer documents.

On merchant banker’s front, this is 28th mandate from its stable in last three fiscals. Out of last 10 listings 1 open at discount and the rest with a premium ranging from 0.14% to 28.72%.

Conclusion / Investment Strategy

DRL has shown consistent growth in top line. Growing demand for tubeless tyres causes concern. Considering fully priced issue, investors may consider investment for long term.

Review By Dilip Davda on September 22, 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. 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: ).

Dolfin Rubbers IPO FAQs

  1. 1. Why Dolfin Rubbers IPO?

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

  2. 2. How is Dolfin Rubbers IPO?

    Read the Dolfin Rubbers IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Dolfin Rubbers IPO what should investors do?

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

  4. 4. Is Dolfin Rubbers IPO good?

    Our recommendation for Dolfin Rubbers IPO is to subscribe for long term.

  5. 5. Is Dolfin Rubbers IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Dolfin Rubbers IPO.

  6. 6. When will Dolfin Rubbers IPO allotment status?

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

  7. 7. When will Dolfin Rubbers IPO list?

    The Dolfin Rubbers IPO will list on Wednesday, October 10, 2018, at BSE SME.


1. Harsimran Singh     Link|September 23, 2018 4:30:06 AM
Dear sir,
This is Harsimran from Dolfin Rubbers Ltd.
Thanks for reviewing our company. We understand the concern of growing tubeless tyre market. Our tubeless tyre project is under process already. We are expecting production trials by end of first quarter 2019.
About Tubes, we manufacture over 100 sizes and some tyre sizes are still being made only tube types.
And due to condition of our roads tubeless tyre's life can be extended by 30 to 40% by just adding a tube.

Harsimran Singh