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Review By Dilip Davda on October 5, 2017
D.P. Abhushan Ltd. (DPAL) is engaged in the retail business of various jewelleries and ornaments made out of gold, diamonds and platinum studded with precious and semi-precious stones. Company's product portfolio includes rings, earrings, armlet, pendants, gajrahs, nose rings, bracelets, chains, necklaces, bangles and other wedding jewellery. As on filing of offer documents, it has four showrooms under the 'D.P. Jewellers' brand located in four different cities of India i.e. Ratlam, Indore, Bhopal and Udaipur. All of these showrooms are operated and managed by it, and has been taken on rental basis. Further, it has plans to expand its retail network by opening another showroom in Indore, Madhya Pradesh by the end of October'17, for which it has purchased area comprising of 10,395 sq ft. at DNR 90, Mahatama Gandhi Marg, Yashwant Niwas Road, Indore. The manufacturing of jewellery products are done through job work from third parties. Further, DPAL also purchases readymade jewellery from independent jewelers. It has also entered into an agreement dated May 05, 2015 with R.S. Diamonds Private Limited for sale of diamond jewelleries under brand of 'Divine Solitaires' from its retail outlets.
DPAL has also installed 5 wind turbine generators of 750 KW each in Village Bagia & Naveli, Ratlam, Madhya Pradesh in Sept.'12. In Jan.'13, the Company entered into an agreement with MPPMCL (M.P. Power Management Co. Ltd.) for exclusive sale of power, generated from wind turbine generators to MPPMCL. Company has outsourced all operations and maintenance activities relating to wind turbines to a third party.
To part finance its working capital and general corpus fund needs, DPAL is coming out with a maiden IPO of 5932000 equity shares of Rs. 10 each with a fixed price of Rs. 28 per share to mobilize Rs.16.61 crore. Issue opens for subscription on 09.10.17 and will close on 11.10.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Issue constitutes 26.65% of the post issue paid up capital of the company. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Hem Securities Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Company's entire current equity capital is raised at par. Post issue, its current paid up equity capital of Rs. 16.32 crore will stand enhanced to Rs. 22.25 crore.
On performance front, DPAL has posted turnover/net profits of Rs. 409.45 cr. / Rs. 2.15 cr. (FY14), Rs. 459.89 cr. / Rs. 1.31 cr. (FY15), Rs. 488.22 cr. / Rs. 3.25 cr. (FY16) and Rs. 453.71 cr. / Rs. 4.88 cr. (FY17). For 31 days ended on 01.05.17 of the current fiscal, it has reported net profit of Rs. 0.80 crore on a turnover of Rs. 75.90 crore. DPAL has posted growth in top lines from FY14 to 16 and seen decline in FY17. Its bottom line too suffered in FY 15. Thus it has shown inconsistency in performance. Issue is priced at a P/BV of 2.05. It has posted an average EPS of Rs. 2.29 and average RoNW of 19.15% for last three fiscals. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 7 against industry average of 45. Thus issue is priced reasonably.
On merchant banker's front, this is the 41st mandate from its stable so far. Out of last 10 recent listings, 1 issue opened at discount, 2 at a premium of 2.5 to 5% and the rest with 20% premium to offer price on the day of listing.
Review By Dilip Davda on October 5, 2017
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 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: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of D P Abhushan Ltd offers an early investment opportunity in D P Abhushan Ltd. A stock market investor can buy DP Abhushan IPO shares by applying in IPO before D P Abhushan Ltd shares get listed at the stock exchanges. An investor could invest in DP Abhushan IPO for short term listing gain or a long term.
Read the DP Abhushan IPO recommendations by the leading analyst and leading stock brokers.
DP Abhushan IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the DP Abhushan IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for DP Abhushan IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the DP Abhushan IPO.
The DP Abhushan IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit DP Abhushan IPO allotment status to check.
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