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GCM Commodity & Derivatives Ltd IPO Review (Avoid)

Review By Dilip Davda on July 30, 2013

We have yet another BSE SME platform IPO entering this week and thus primary market is having some action in the lull season. Details of the issue are as under:

GCM Commodity & Derivatives Ltd. is currently engaged in the business of investing in National Spot Exchange Limited (NSEL) Investment Products for arbitrage opportunities and commodity broking. It provides commodity broking facilities through its membership of NSEL. The Company become the Trading-cum-Clearing member of National Spot Exchange Limited and started the commodity broking business in May 2013. In the past our Company was engaged in the business of Commodity and Equity Trading.

Now the company mulls expansion of its business and planning the Membership of Multi Commodity Exchange of India Limited (MCX) and also raises general corpus fund and margin money for its business operations. To part finance this, the company is coming out with an issue of 3510000 equity share of Rs. 10 each at a affixed price of Rs. 20 per share to garner Rs. 7.02 crore. Issue opens for subscription on 01.08.13 and will close on 05.08.13. The company is also in the business of investing in NSEL Investment Products for arbitrage opportunities since FY 2013 through another broker. Issue is lead managed by Inventure Merchant Banker Services Pvt. Ltd and Purva Sharegistry (India) Pvt. Ltd is the registrar to the issue. Minimum application is to be made or 6000 shares and in multiples thereof, thereafter.  Post allotment, the shares will be listed n BSE SME.

As for the performance of the company, it has shown inconsistency in it with an average EPS of Rs. 0.52 for last three fiscals (EPS of Rs. 0.97 for 2013, Rs. (0.04) for 2012 and Rs. 0.29 for 2011). Thus for the fiscal 2012 it posted loss. Thanks to premiums collected during March 2009 to 2013 with preferential offers ranging between Rs. 20 to Rs. 50 per share that helped it boosting its NAV at Rs. 24.03 that will come down to Rs. 22.13 post issue. The current paid up equity of Rs. 3.92 crore will rise to Rs. 7.43 crore after the offer.

Conclusion / Investment Strategy

As for the merchant banker, this is the third SME offer from it. Inventure group has established itself as the mega player in stock market as it has operated in its parent company’s shares Inventure Growth post listing and has also done similar operations in past two SME offers of Bronze Infra-Tech and GCM Securities. This may lure speculative investors for investment in this offer, but others should stay away from this pricy offer that is made at a P/E of 40 plus.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on July 30, 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: ).

GCM Commodity IPO FAQs

  1. 1. Why GCM Commodity IPO?

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

  2. 2. How is GCM Commodity IPO?

    Read the GCM Commodity IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. GCM Commodity IPO what should investors do?

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

  4. 4. Is GCM Commodity IPO good?

    Our recommendation for GCM Commodity IPO is to avoid.

  5. 5. Is GCM Commodity IPO worth Investing?

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

  6. 6. When will GCM Commodity IPO allotment status?

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

  7. 7. When will GCM Commodity IPO list?

    The GCM Commodity IPO will list on Friday, April 5, 2013, at BSE SME.