Euro India Fresh Foods IPO review (Avoid)

Review By Dilip Davda on Mar 16, 2017

Euro India Fresh Foods Ltd (EIFF) is a well known Gujarat based company supplying wide range of packaged snacks and fruit beverages products under its brand “Euro – Fresh Khao Healthy Raho”. The company is engaged in manufacturing of chips, extruder snacks, namkeen, farali, chikki, fruit beverages and packaged drinking water. While it manufactures chips, getmore (a variety of extruder snacks) and packaged drinking water, other products are manufactures by its group entities on their behalf. Namkeens are manufactured by both the parties. EIFF’s products comply with requisite food safety standards including ISO and FSSAI norms. For distribution channel it has 5 consignee depots, 93 super stockists and over 2800 distributors. So far it has covered 10 states in India and is in the process of setting up of its distribution network in Goa and Chhattisgarh.

To part finance its repayment of loans, working capital and general corpus fund needs, the company is coming out with a maiden IPO of 6571200 equity share of Rs. 10 each (comprising of fresh equity issue of 4800000 shares and offer for sale of 1771200 shares) at a fixed price of Rs. 78 per share to mobilize Rs. 51.26 crore. Issue opens for subscription on 21.03.17 and will close on 24.03.17. Minimum application is to be made for 1600 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Pantomath Capital Advisors Pvt Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. Its entire equity so far is issued at par. Post issue its current paid up equity capital of Rs. 20 crore will stand enhanced to Rs. 24.80 crore.

On performance front, the company has posted turnover/net profits of Rs. 11.81 cr. / Rs. (-0.02) cr. (FY13), Rs. 47.87 cr. / Rs. 0.26 cr. (FY14), Rs. 42.89 cr. / Rs. 0.41 cr. (FY15) and Rs. 47.56 cr. / Rs. (-0.05) cr.(FY16). For the first half of the current fiscal it has earned net profit of Rs. (-0.71) crore on a turnover of Rs. 22.89 crore. Thus on performance part, while its top line has almost remained stagnant, it has incurred losses in last 18 months working that has eroded its net worth that has turned negative. As on 30.09.16 its NAV stands at Rs. 9.94. Thus asking price has negative P/E and and P/BV of 7.8 times making it a costly offer.

On merchant banker’s front, this is the 39th mandate from its stable and past mandates have shown mixed trends. However, last 10 issues have shown positive trends on listing dates.

Conclusion: Based on stagnant working and negative net worth, one may give it a miss.


Conclusion / Investment Strategy

Based on stagnant working and negative net worth, one may give it a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Mar 16, 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

Euro India Fresh Foods IPO FAQs

  1. 1. Why Euro India Fresh Foods IPO?

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

  2. 2. How is Euro India Fresh Foods IPO?

    Read the Euro India Fresh Foods IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Euro India Fresh Foods IPO what should investors do?

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

  4. 4. Is Euro India Fresh Foods IPO good?

    Our recommendation for Euro India Fresh Foods IPO is to avoid.

  5. 5. Is Euro India Fresh Foods IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Euro India Fresh Foods IPO.

  6. 6. When will Euro India Fresh Foods IPO allotment status?

    The Euro India Fresh Foods IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Euro India Fresh Foods IPO allotment status to check.

  7. 7. When will Euro India Fresh Foods IPO list?

    The Euro India Fresh Foods IPO will list on Friday, March 31, 2017, at NSE SME.








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