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Krishna Phoschem NSE SME IPO review (Apply)

Review By Dilip Davda on Feb 9, 2017

Krishna Phoschem Ltd (KPL) is primarily engaged in manufacturing of fertilizers, intermediate dyes and other allied chemical products in the state of Madhya Pradesh. It has emerged as the manufacturers of Benefited Rock Phosphate (BRP), Single Super Phosphate (SSP), Granulated Single Super Phosphate (GSSP), H-Acid, intermediate dyes and other allied chemicals. Company’s products Single Super Phosphate (SSP) and Granulated Single Super Phosphate (GSSP) is used in replenishing “P” (Phosohorous) in the soil and act as a fertilizer for crop. KPL manufactures specialized chemicals used for dying cloth such as H acid, E K acid, Vinyl sulphone, PNCBOSA, 4 sulphoantranilic acid, Violet acid, Sulpho Tobias acid. The chemicals produce by it is used as Dye intermediate specifically for textiles Industry.

For listing of its share, the company is coming out with a maiden IPO of 6576000 equity share of Rs. 10 each as offer for sale at a fixed price of Rs. 30 per share to mobilize Rs. 19.73 crore. Issue opens for subscription on 13.02.17 and will close on 16.02.17. Minimum application is to be made for 4000 shares and in multiple thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge platform. Issue is solely lead managed by Hem Securities Ltd and Link Intime India Pvt Ltd is the registrar to the issue. Except for issue at a price of Rs. 20 per share in November 14 and at a price of Rs. 23.50 in October 16, all equity is issued at par. It has also issued bonus shares in the ratio of 1 for 2 in December 2011. Being offer for sale, its post issue equity remains at Rs. 24.90 cr.

On performance front, the company has posted turnover/net profits of Rs. 90.84 cr. / Rs. 5.05 cr., (FY14), Rs. 77.26 cr. / Rs. 2.93 cr. (FY15) and Rs. 90.63 cr. / Rs. 3.15 cr. (FY16). For the eight months period ended at 30.11.16 it has posted turnover of Rs. 45.20 cr. with a net profit of Rs. 3.93 cr. If we annualize these earnings and attribute on the equity capital, then asking price is at a P/E of 12 plus against industry composite P/E of 20 plus. Offer is at a P/BV of around 1.3. Thus issue pricing appears reasonable.

On merchant banker’s front, this is the 27th mandate from their stable and earlier IPOs have shown mixed trends.

Conclusion: Good monsoon this year augurs well for this company. Cash surplus investors may consider investment for medium to long term.

 


Conclusion / Investment Strategy

Good monsoon this year augurs well for this company. Cash surplus investors may consider investment for medium to long term.  

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Feb 9, 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

Krishana Phoschem IPO FAQs

  1. 1. Why Krishana Phoschem IPO?

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

  2. 2. How is Krishana Phoschem IPO?

    Read the Krishana Phoschem IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Krishana Phoschem IPO what should investors do?

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

  4. 4. Is Krishana Phoschem IPO good?

    Our recommendation for Krishana Phoschem IPO is to subscribe.

  5. 5. Is Krishana Phoschem IPO worth Investing?

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

  6. 6. When will Krishana Phoschem IPO allotment status?

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

  7. 7. When will Krishana Phoschem IPO list?

    The Krishana Phoschem IPO will list on Monday, February 27, 2017, at NSE SME.