Karnavati Finance Ltd IPO Review (Avoid)

Review By Dilip Davda on Jan 16, 2015

 

Karnavati Finance Ltd (KFL): is a NBFC company engaged in financing activities. To augment its fund requirement and listing of the equity, it is coming out with an IPO of 2580000 equity share of Rs. 10 each at par value to mobilize Rs. 2.58 crore. Issue opens for subscription on 19.01.15 and will close on 21.01.15. Post allotment shares will be listed on BSE SME. Minimum application is to be made for 10000 shares and in multiples thereon, thereafter. Issue is managed by Corporate Strategic Allianz Ltd and Satellite Corporate Services Pvt Ltd is the registrar to the issue. Post this issue, existing equity of Rs. 5.78 crore will rise to Rs. 8.36 crore.

 

 For the past three fiscals the company has posted negative EPS of (-Rs. 0.64). For the year ended 31.3.14 it earned net profit of Rs. 0.04 crore on a total income of Rs. 0.37 crore translating into EPS of Rs. 0.07. For first four months ended 31.07.14 it posted loss of Rs. 0.05 crore on a total income of Rs. 0.09 crore. As on 31.07.14 its NAV stood at Rs. 8.09. Thus IPO is at a negative P/E as well as at 1.25 P/BV with dull performance so far.

 

Lead Manager has poor track record. This is the seventh mandate from it and earlier mandates failed to live up to the confidence of the investors. It had four main line IPOs and two SME lPOs in the past.


Conclusion / Investment Strategy

 

Considering entry barrier, poor performance of the company as well as low preference by broking community for SME IPOs, this issue is not worth.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Jan 16, 2015

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

Karnavati Finance IPO FAQs

  1. 1. Why Karnavati Finance IPO?

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

  2. 2. How is Karnavati Finance IPO?

    Read the Karnavati Finance IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Karnavati Finance IPO what should investors do?

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

  4. 4. Is Karnavati Finance IPO good?

    Our recommendation for Karnavati Finance IPO is to avoid.

  5. 5. Is Karnavati Finance IPO worth Investing?

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

  6. 6. When will Karnavati Finance IPO allotment status?

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

  7. 7. When will Karnavati Finance IPO list?

    The Karnavati Finance IPO will list on Thursday, February 5, 2015, at BSE SME.








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