Jash Engineering NSE SME IPO review (Subscribe)

Review By Dilip Davda on Sep 25, 2017

Jash Engineering Ltd. (JEL) is engaged in manufacturing of water control gates, flap valves, knife gates valves, energy dissipating valves, water hammer control valves, fine and coarse screens, screening conveying equipment, screening washing and compaction equipment, industrial valves for bulk solids handling, hydro power screw generator, screw pump and process equipment like detritors, clarifiers, clariflocculators, thickeners, decanters aerators, trickling filters, dissolved air flotation (DAF) units, rotary drum slackers, rake classifiers, pressure sand filters, etc. for water, water waste and effluent treatment plants. Thus it offers a single stop solution under one roof including Design, Casting, Fabrication, and Assembly & Testing and provides the most varied range of these products in largest possible sizes. To ensure this, JEL is continuously investing in its manufacturing capability as well as in development of new products & technologies either on its own or through collaboration with suitable technology partners and leaders in the trade. The products of JEL finds application in water intake systems, water and waste water pumping stations and treatment plants, storm water pumping stations, water transmission lines, power, steel, cement, paper & pulp, petrochemicals, chemical, fertilizers and other process plants.

To part finance its setting up of new manufacturing plant for proposed Unit IV on leased land, expansion of Unit III facility, working capital and general corpus fund needs, JEL is coming out with a maiden IPO of 4000800 equity share of Rs. 10 each via book building route with a price band of Rs. 115 – 120 to mobilize Rs. 46.01 to 48.01 crore based on lower and upper price bands. Issue consists of 2261198 fresh equity share issue and 1739602 shares by offer for sale. Issue opens for subscription on 28.09.17 and will close on 03.10.17. Minimum application is to be made for 1200 shares and in multiples thereon, thereafter. Post allotment shares will be listed on NSE SME Emerge. Issue is solely lead managed by Systematix Corporate Services Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. Issue constitutes 33.80 % of post issue paid up equity capital of the company. From incorporation till March 1999 it issued equity shares at par. Thereafter, it raised further equity in a price range of Rs. 20 to Rs. 97.16 per share between December 2008 and September 2012. It has also issued bonus shares in the ratio of 4 for 1 in October 1994. Post issue, its current paid up equity capital of Rs. 9.58 crore will stand enhanced to Rs. 11.84 crore. Cost of acquisition of shares by promoters ranging from Rs. 15.39 to Rs. 19.73 per share.

On performance front, JEL has (on consolidated basis) posted turnover/net profits of Rs. 113.91 cr. / Rs. 7.73 cr. (FY14), Rs. 119.82 cr. / Rs. 7.62 cr. (FY15), Rs. 121.94 cr. / Rs. 7.28 cr. (FY16) and Rs. 161.16 cr. / Rs. 10.26 cr. (FY17). For FY 15 and 16 it witnessed pressure on margins despite improved top line and higher other income. JEL has posted an average EPS of Rs. 9.22 and average RoNW of 11.17% for last three fiscals. Issue is priced at a P/BV of 1.37. It has no listed peers to compare with. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 14. Issue appears to have been fully priced.

On merchant banker's front, this is the first mandate from its stable and has no track record.


Conclusion / Investment Strategy

Investment for long term may be considered. The asking price is at a P/E of around 14. Jash Engineering IPO appears to have been fully priced.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Sep 25, 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

Jash Engineering IPO FAQs

  1. 1. Why Jash Engineering IPO?

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

  2. 2. How is Jash Engineering IPO?

    Read the Jash Engineering IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Jash Engineering IPO what should investors do?

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

  4. 4. Is Jash Engineering IPO good?

    Our recommendation for Jash Engineering IPO is to subscribe.

  5. 5. Is Jash Engineering IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Jash Engineering IPO.

  6. 6. When will Jash Engineering IPO allotment status?

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

  7. 7. When will Jash Engineering IPO list?

    The Jash Engineering IPO will list on Wednesday, October 11, 2017, at NSE SME.








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