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Review By Dilip Davda on June 7, 2017
Globe Textiles (India) Ltd. (GTIL) is engaged in manufacturing of Garments, cotton printed fabrics, home textiles and fancy fabrics. It has three manufacturing units in and around Ahmedabad. GTIL caters both domestic as well as international markets and has been recognized by Government of India as a “One Star Export House” and holds a valid certificate from September, 2016 till September, 2021. The company holds OKO-TEK certification for its manufacturing units.
To part finance its working capital and general corpus fund requirements, the company is coming out with a maiden IPO of 2688000 equity share of Rs. 10 each at a fixed price of Rs. 51 per share to mobilize Rs. 13.71 crore. Issue opens for subscription on 12.06.17 and will close on 15.06.17. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Issue consists of fresh equity issue of 1368000 shares and 1320000 shares by way of offer for sale. From inception till 2006 it issued all equity at par. Thereafter it raised further equity in a price range of Rs.50-60. It also issued bonus in the ratio of 2 shares for every 1 share held in March 2017. Post issue its current paid up equity capital of Rs. 8.71 crore will stand enhanced to Rs. 10.08 crore. Post allotment, shares will be listed on NSE SME Emerge. Issue is lead managed by Hem Securities Ltd and Bigshare Services Pvt Ltd is the registrar to the issue.
On performance front, for last four fiscals, it has posted turnover/net profits of Rs. 166.30 cr. / Rs. 2.23 cr. (FY14), Rs. 175.26 cr. / Rs. 2.44 cr. (FY15), Rs. 183.16 cr. / Rs. 1.57 cr. (FY16) and Rs. 191.86 cr. / Rs. 3.25 cr. (FY17). It suffered a setback in bottom line for FY 16. If we attribute latest earnings on the fully diluted equity post issue, asking price is at a P/E of 15 plus (against industry composite P/E of 23 plus) and at a P/BV of 1.78. It has posted RoNW at an average of 10.99% for last three fiscals. Company’s peers are trading at a P/E of 18 to 51. Thus issue appears to have been priced reasonably.
On merchant banker’s front, this is the 33rd mandate from its stable and last 10 listings have given positive returns on the day of listing.
Conclusion: Investment may be considered for medium to long term.
Review By Dilip Davda on June 7, 2017
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 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 ).
The initial public offer (IPO) of Globe Textiles (India) Limited offers an early investment opportunity in Globe Textiles (India) Limited. A stock market investor can buy Globe Textiles IPO shares by applying in IPO before Globe Textiles (India) Limited shares get listed at the stock exchanges. An investor could invest in Globe Textiles IPO for short term listing gain or a long term.
Read the Globe Textiles IPO recommendations by the leading analyst and leading stock brokers.
Globe Textiles IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Globe Textiles IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Globe Textiles IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Globe Textiles IPO.
The Globe Textiles IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Globe Textiles IPO allotment status to check.
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RHP
i would take average earning as 2 Cr
i.e, priced 25 times.