Eco Friendly Food Processing Park Ltd IPO Review (Avoid)

Review By Dilip Davda on Dec 23, 2012

While we have listings of three mini mega to mega IPOs that entered in the second week of December 2012 this week, one more BSE SME IPO is trying to bid adieu and take a tally to a dozen SME IPOs for the calendar year 2012.

As most of the SME IPOs have given some listing gains, mainly due to market making efforts and thus big ticket investors interest has been taken care of, this IPO too may find some takers.

This time we have an IPO from Eco Friendly Food Processing Park Ltd. (EFFPP) that is planning development of farm land for organic farming, construction of storage sheds, solar fencing and brand building. To part finance this along with raising other general corpus funds the company is offering 3006000 equity share of Rs. 10 each with a fixed priced of Rs. 25 per share (i.e. with a premium of Rs. 15 per share. Issue opens for subscription on 27.12.12 and will close on 31.12.12. Minimum application is to be made for 6000 shares and in multiples thereof thereafter. The net issue constitutes 25.30% of the post issue paid up capital of the company. Issue is lead managed by Guiness Merchant Bankers Pvt. Ltd. and Cameo Corporate Services Ltd. acts as registrar to the issue.

EFFPP has to its pride in using a delicate balance between the latest technology in production processes and material usages available; and practical know how. The company has a committed team that spends 80% of its time on the road throughout Northern India to ensure a high level of customer satisfaction, as well as visiting those expressing interest in our products. The team consists of fully trained experienced people who have been around the product range since each piece began. It is due to this close contact with the customers that ECO FRIENDLY has such a high success level in all improvements to designs, as well as releases of new innovations. ECO FRIENDLY's continuous research and development focus assures a maximum economic benefit to each individual owner.

On company's performance front, it has posted an average Rs. 3.13 EPS for last three fiscals.

As far as lead manager is concerned, it had a mandate for RCL Retail SME IPO that has given mini listing gain and is currently quoting at discount. NAV as on 30.09.12 is at Rs. 14.96. For first half of current fiscal its top and bottom line remains static. It has issued bonus shares in the ratio of 3 shares for every 1 share held in September 2012 post issuing fresh 2.5 lakh equity shares at a price of Rs. 25 per share twice in March and June 2012. Post issue the equity will rise to Rs. 9.89 crore and it we attribute current earnings on this, EPS stands at Rs. 2 that translates offer price at a P/E of 12.5 which is very high.


Conclusion / Investment Strategy

As this group's another company Esteem Bio Organic Food Processing Ltd is also planning BSE SME Platform IPO going forward, a market operation on this counter is not ruled out post listing. Retail investors should give it a miss. Risk avers HNIs can dare to park moderate fund.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Dec 23, 2012

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

Eco Friendly Food IPO FAQs

  1. 1. Why Eco Friendly Food IPO?

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

  2. 2. How is Eco Friendly Food IPO?

    Read the Eco Friendly Food IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Eco Friendly Food IPO what should investors do?

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

  4. 4. Is Eco Friendly Food IPO good?

    Our recommendation for Eco Friendly Food IPO is to avoid.

  5. 5. Is Eco Friendly Food IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Eco Friendly Food IPO.

  6. 6. When will Eco Friendly Food IPO allotment status?

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

  7. 7. When will Eco Friendly Food IPO list?

    The Eco Friendly Food IPO will list on Monday, January 14, 2013, at BSE SME.
More Eco Friendly Food IPO Views / Analysis / Recommendations ...








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