Jet Infraventure Limited IPO Review (Avoid)

Review By Dilip Davda on Oct 28, 2014

Before Diwali primary market geared up for Monte Carlo main board IPO in Mid October 2014, but due to difference of opinion on pricing of the issue between Anchor Investors and Merchant Bankers, the issue got postponed till December 2014. This has definitely played a spoil sport for primary market and gave message of continuing greed for IPO pricing by Merchant Bankers and Promoters. Amidst given circumstances, we continue to witness SME IPO hitting the market with their tiny offers. After Diwali holidays we have SME IPO from Jet Infraventure Ltd (JIL) for BSE SME Listing. Details of the said issue are as under:

JIL was incorporated as Jet Info (India) Private Limited‘pursuant to the provisions of the Companies Act, 1956. The Company is a growing real estate development company headquartered in Mumbai and focusing on residential projects. It sub-contracts projects to third party contractors. JIL has executed residential projects in the States of Maharashtra and Gujarat. Our Company focuses on developing residential projects on affordable pricing, to prospective customers, without compromising on quality construction and this is ensured by experienced project execution team and third party architect(s) appointed by our Company on project to project basis. It has completed three projects namely Shree Samartha and Sai Residency near Alibaug - Maharashtra and Jet Excellency at Navsari- Gujarat.

To part finance its commercial project under development and repayment of partial debt and raising corpus fund,  the company is offering 360000 equity shares of Rs. 10 each at a fixed price of Rs. 125 per share to mobilize Rs. 4.50 crore. Issue opens for subscription on 30.10.14 and will close on 11.11.14. Minimum application is to be made for 1000 shares and in multiples thereon, thereafter. Issue is lead managed by Pantomath Capital Advisors Pvt Ltd and registrar to the issue is Bigshare Services Pvt. Ltd. In April 2014, the company converted loans in to equity at a price of Rs. 118 per share and issued bonus in the ratio of 7 for 1 in September 2014 that brought its paid up current equity of Rs. 0.69 crore that will rise to Rs. 1.05 crore post IPO. Shares will be listed on BSE SME.

On performance front, the company reported turnover of Rs. 0.77 crore with a loss of Rs. 0.30 crore for 2011-12, on nil turnover with some inventory management a net profit of Rs. 0.10 crore for 2012-13 and on a turnover of Rs. 8.59 crore with a net profit of Rs. 0.85 crore for 2013-14. For one month of current fiscal ended on 30.04.14, it has earned net profit of Rs. 0.17 crore on a turnover of Rs.0.34 crore and recurrence of this appears a remote possibility. This performance has many miss-matches. Based on latest earnings of 2014-15 on annualized basis, the company may post an approximate EPS of Rs. 19.50 and if we attribute this to the asking price, then the issue is at a P/E of 7. On the basis of 2013-14 full year’s performance, the asking price is at a P/E of 15 plus. This makes it a pricy bet.

On merchant banker’s performance front, this is the sixth out of seventh public domain mandate and has mixed trends.


Conclusion / Investment Strategy

Remark: Risk aver investors can park funds for long term at their own discretion keeping in mind the trading lot barriers on application and trading post listing.

(Disclaimer: Author has no plans to invest in this IPO)

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Oct 28, 2014

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

Jet Infraventure IPO FAQs

  1. 1. Why Jet Infraventure IPO?

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

  2. 2. How is Jet Infraventure IPO?

    Read the Jet Infraventure IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Jet Infraventure IPO what should investors do?

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

  4. 4. Is Jet Infraventure IPO good?

    Our recommendation for Jet Infraventure IPO is to avoid.

  5. 5. Is Jet Infraventure IPO worth Investing?

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

  6. 6. When will Jet Infraventure IPO allotment status?

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

  7. 7. When will Jet Infraventure IPO list?

    The Jet Infraventure IPO will list on Tuesday, November 25, 2014, at BSE SME.

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