Esteem Bio Organic Food Processing Ltd IPO Review (Avoid)

Review By Dilip Davda on January 15, 2013

We have been waiting for main line IPO to break the ice for the year 2013 for the primary market, but, time and again, it is the BSE SME platform IPO of Esteem Bio Organic Food Processing Ltd., a group company of Eco Friendly Food Processing Park Ltd. that went public and just got listed with dull movement. 

Esteem Bio Organic Food (EBOF) is engaged in manufacturing of wheat, rice, pulses and vegetables. It operates one of the largest agriculture unit in India, at Pantnagar(Kichha), Udham Singh Nagar in Uttaranchal, a state in northern India. The company mulls Setting up of shade net cultivation facility, development of farm land for organic farming, procurement of farm tools and equipments and raising general corpus fund. To part finance these, the company is coming out with an issue of 4500000 equity share of Rs. 10 each at a fixed price of Rs. 25 per share. The issue is opening on 18.01.2013 and will close on 22.01.2013. Minimum application is to be made for 6000 shares and in multiples thereof, thereafter. The issue is lead managed by Guiness Merchant Bankers Pvt Ltd. and Cameo Corporate Services Ltd is the registrar to the issue. The shares will be listed on BSE SME.

On merchant banker's performance front, it had the mandate for Eco Friendly Food IPO of the same group that go listed on last Monday and has performed poorly despite market making attached to it. ON the front of company's performance, for last three fiscals it has posted an average EPS of Rs. 3.14 and for the first half of current fiscal it stands at Rs. 1.14 on an equity base of Rs. 10.40 crore that will stand enhanced to Rs. 14.90 crore posts this IPO. If we attribute the earnings on enhanced equity than the asking price is at a P/E of 15 plus and its peer are available at around 5 to 7 P/E. With offers at hefty premium in the past, it also made bonus issues in the ratio of 3 for 1 in October 2012.

Conclusion / Investment Strategy

Considering the listless performance of other group company post listing and higher asking price for this offer, it is better to give it a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on January 15, 2013

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: dilip_davda@rediffmail.com ).

Esteem Bio IPO FAQs

  1. 1. Why Esteem Bio IPO?

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

  2. 2. How is Esteem Bio IPO?

    Read the Esteem Bio IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Esteem Bio IPO what should investors do?

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

  4. 4. Is Esteem Bio IPO good?

    Our recommendation for Esteem Bio IPO is to avoid.

  5. 5. Is Esteem Bio IPO worth Investing?

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

  6. 6. When will Esteem Bio IPO allotment status?

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

  7. 7. When will Esteem Bio IPO list?

    The Esteem Bio IPO will list on Thursday, February 7, 2013, at BSE SME.
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