Geekay Wires NSE SME IPO review (Avoid)

Review By Dilip Davda on Aug 2, 2017

Geekay Wires Ltd (GWL) is in the business of manufacturing high quality galvanized steel wires and wire
products and have been meeting the requirement of various clients in the government and private sectors like power, construction, automobile, general engineering and domestic segments. GWL is an ISO 9001: 2008 certified, manufacturer, exporter and supplier of the superlative wires and cables like galvanized wire, earth wire, stay wire, ACSR steel core, cable armoured wire, guy strand, barbed wire, spring steel wire, patented wire, detonator wire, and spring steel wire, nails and fasteners etc.

The company has a full‐fledged quality testing laboratory and well qualified and experienced personnel. With robust infrastructure & testing facilities GWL is in the preferred-vendor list of PGCIL and in many State Transmission & Distribution Companies, electrical contractors, corporate engaged in turnkey business of creating infrastructure for power transmission & distribution, cable & conductor manufacturing, etc.

To part finance its working capital and general corpus fund needs, GWL is coming out with a maiden IPO of 3332000 equity share of Rs. 10 each at a fixed price of Rs. 33 per share to mobilize Rs. 11 crore. Issue opens for subscription on 09.08.17 and will close on 14.08.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely managed by Aryaman Financial Services Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. GWL has issued entire equity at par so far. Post issue, its current paid up equity capital of Rs. 5.00 crore will stand enhanced to Rs. 8.33 crore.

On performance front, the company has posted turnover/net profits of Rs cr. / Rs. 0.17 cr. (FY14), Rs. 61.12 cr. / Rs. 0.23 cr. (FY15), Rs. 81.06 cr. / Rs. 0.65 cr. (FY16) and Rs. 67.16 cr. / Rs. 0.65 cr. (FY17), For FY 17 although its top line has seen erosion, with the help of Rs. 2.84 crore other income, it has maintained bottom line. For last three fiscals it has posted an average EPS of Rs. 1.16 with average RoNW of 9.15%. Thus the asking price is at a P/E of around 28.45 (based on Rs. 5 crore paid up equity as on 31.03.17) against industry average of 19.30. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 42 and at a P/BV of 2.45. Thus issue pricing appears very greedy.

On merchant banker's front, as per prospectus details, this is the 16th mandate from its stable in last three fiscals. Out of last 10 listings, two issues opened at a discount to offer price, three just around offer price and the rest marked positive openings.

Conclusion: There is no harm in giving this highly priced issue a miss.


Conclusion / Investment Strategy

There is no harm in giving this highly priced issue a miss. The asking price is at a P/E of 42 and at a P/BV of 2.45. Thus issue pricing appears very greedy.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Aug 2, 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

Geekay Wires IPO FAQs

  1. 1. Why Geekay Wires IPO?

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

  2. 2. How is Geekay Wires IPO?

    Read the Geekay Wires IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Geekay Wires IPO what should investors do?

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

  4. 4. Is Geekay Wires IPO good?

    Our recommendation for Geekay Wires IPO is to avoid.

  5. 5. Is Geekay Wires IPO worth Investing?

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

  6. 6. When will Geekay Wires IPO allotment status?

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

  7. 7. When will Geekay Wires IPO list?

    The Geekay Wires IPO will list on Thursday, August 24, 2017, at NSE SME.








Search Chittorgarh.com:

Download Our Mobile App

Android App iOS App