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Dynamic Cables BSE SME IPO review (Apply)

Review By Dilip Davda on Nov 29, 2017

Dynamic Cables Ltd. (DCL) is engaged in manufacturing of Cables and Conductors which widely include manufacturing of Low Voltage and High Voltage Power Cables, Aerial Bunched Cables, All Aluminium Conductor (A.A.C.), All Aluminium Alloy Conductor (A.A.A.C.), Aluminium conductor steel reinforced (A.C.S.R.) Conductors and Service Drop Cables used for transmission and distribution of Electricity. Its manufacturing facilities are distributed in three units located in Jaipur, Rajasthan. DCL’s products are type tested & approved by various NABL Accredited laboratories like: CPRI, ERDA & TAG Corporation. Being “Government Recognized Export House” it exports products to countries like Kenya, Tanzania, TOGO, Nigeria, Benin, Uganda, Rwanda, NEPAL, Mauritius, Afghanistan, Jordan, Dubai etc

To part finance its working capital and general corpus fund needs, DCL is coming out with a maiden IPO of 5844000 equity shares of Rs. 10 each at a fixed price of Rs. 40 per share to mobilize Rs.23.38 crore. Issue opens for subscription on 04.12.17 and will close on 06.12.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Hem Securities Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.55% of the post issue paid up capital of the company. Since incorporation till February 2014 it issued equity at par. In February 2017 it issued fresh equity at a price of Rs. 81 per share and has also issued bonus shares in the ratio of 1 share for every 2 shares held. Post issue its current paid up equity capital of Rs. 16.17 crore will stand enhanced to Rs. 22.01 crore. The average cost of acquisition of shares by the promoters ranges from Rs. 6.67 to Rs. 14.02 per share.

On performance front, DCL has posted turnover/net profits of Rs. 199.17 cr. / Rs. 1.57 cr. (FY14), Rs. 262.12 cr. / Rs. 2.54 cr. (FY15), Rs. 269.80 cr. / Rs. 6.80 cr. (FY16) and Rs.302.15 cr. / Rs. 7.92 cr. (FY17). For Q1 of current fiscal it has earned net profit of Rs. 2.05 cr. on a turnover of Rs. 88.85 cr. Issue is priced at a P/BV of 1 based on its NAV as on 30.06.17 and at 1.36 on post issue NAV. For last three fiscals it has reported an average EPS of Rs. 4.35 and average RoNW of 20.06%. If we annualize the latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 11 against industry composite of 29 plus. Thus issue appears reasonably priced.

On merchant banker’s front, this is the 43rd mandate from its stable so far. Out of last 10 IPOs, 1 opened at discount and the rest opened with a premium ranging from 3 to 20% on the offer price on listing day.

Conclusion: Investment may be considered for medium to long term (Subscribe).


Conclusion / Investment Strategy

Investment may be considered for medium to long term (Subscribe).

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Nov 29, 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

Dynamic Cables IPO FAQs

  1. 1. Why Dynamic Cables IPO?

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

  2. 2. How is Dynamic Cables IPO?

    Read the Dynamic Cables IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Dynamic Cables IPO what should investors do?

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

  4. 4. Is Dynamic Cables IPO good?

    Our recommendation for Dynamic Cables IPO is to subscribe.

  5. 5. Is Dynamic Cables IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Dynamic Cables IPO.

  6. 6. When will Dynamic Cables IPO allotment status?

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

  7. 7. When will Dynamic Cables IPO list?

    The Dynamic Cables IPO will list on Thursday, December 14, 2017, at BSE SME.

1 Comments

1. TOPS  Dec 5, 2017 7:27:22 PM
Respected Dawdaji

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS
there are 13 pages ( PAGE NO 203 TO 216 ) giving details of various court cases
resulting in substantial financial Impact ( AMOUNTING TO CRORES OF RUPEES ) on financial position if it goes against company

with all these litigation my question to management & more particularly to Lead Manager to the issue ( HEM SECURITY ) WHETHER PREMIUM CHARGED IS JUSTIFIED ????