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Review By Dilip Davda on April 7, 2017
KMS Medisurgi Ltd (KML) is an arm of KMS group that has interests in stock broking and medical equipment and medical services. KMS Medisurgi was incepted with the purpose of making medical and surgical devices accessible to every possible medical center and professional. Under the banner, it ventured into ethical marketing and distribution of medical devices, surgical disposables, hemostat, surgery equipment, radiology, oncology, diagnostic, cardiology, critical care, urology, research and much other scientific equipment in India.
To meet its rising working capital requirements and generate corpus fund, the company is coming out with a maiden IPO of 900000 equity share of Rs. 10 each at a fixed price of Rs. 30 per share to mobilize Rs. 2.70 crore. Issue opens for subscription on 12.04.17 and will close on 17.04.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Navigant Corporate Advisors Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. After raising initial equity at par from MoA till 2002, it raised further equity at a price of Rs. 30 per share during 2016 and has issued bonus shares in the ratio of 1 for 1 in July 2016. Post issue, its current paid up equity capital of Rs.2.40 crore will stand enhanced to Rs. 3.30 crore.
On performance front, the company has posted turnover/net profits of Rs. 6.23 cr. / Rs. 0.05 cr. (FY13), Rs. 7.67 cr. / Rs. 0.03 cr. (FY14), Rs. 8.93 cr. / Rs. 0.03 cr. (FY15) and Rs. 8.48 cr. / Rs. 0.14 cr. (FY16). For the nine months ended on 31.12.16 it has earned net profit of Rs. 0.14 crore on a turnover of Rs. 5.70 crore. Thus sudden jump in bottom lines for the last one and half fiscal leads to some window dressing ahead of issue plans. If we annualize the latest earnings and attribute on fully diluted equity post issue then asking price is at a P/E of around 60 plus and at a P/BV of 2 plus. Its RoNW is just under 4 % for all these years. As per prospectus, it has no listed peers to compare with.
On merchant banker’s front, this is the 2nd mandate from its stable and the first issue gave returns on the listing day. However, the scrip is at discount to offer price now.
Conclusion: Based on performance the asking price is very high. Only risk avers cash surplus investors may consider investment, others may ignore.
Review By Dilip Davda on April 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 KMS Medisurgi Ltd offers an early investment opportunity in KMS Medisurgi Ltd. A stock market investor can buy KMS Medisurgi IPO shares by applying in IPO before KMS Medisurgi Ltd shares get listed at the stock exchanges. An investor could invest in KMS Medisurgi IPO for short term listing gain or a long term.
Read the KMS Medisurgi IPO recommendations by the leading analyst and leading stock brokers.
KMS Medisurgi IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the KMS Medisurgi IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for KMS Medisurgi IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the KMS Medisurgi IPO.
The KMS Medisurgi IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit KMS Medisurgi IPO allotment status to check.
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