Kwality Pharmaceuticals BSE SME IPO review (Subscribe)

Review By Dilip Davda on Jun 28, 2016

Kwality Pharmaceuticals Ltd (KPL) is engaged in the business of manufacturing of broad range of finished pharmaceutical formulations in a dosage form.  According to the Company, it has the most modern & sophisticated plant, equipments, technique and manpower and is working with new SCHEDULE M and W.H.O. norms and certified with GMP and WHO certificate.

To part finance its laboratory modernization, working capital requirements, the company is coming out with a maiden IPO of 1380000 equity shares of Rs. 10 each at a fixed price of Rs. 45 per share to mobilize Rs. 6.21 crore. Issue opens for subscription on 30.06.16 and will close on 08.07.16. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely managed by Guiness Corporate Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. The issue comprises of fresh equity issue of just 180000 shares and rest is by way of offer for sale. Since incorporation till 2010 it issued equity at par. Then it issued fresh equity in the price range of Rs. 42 to Rs. 250 during 2012 to 2014. It also issued bonus shares in the ratio of 2 for 1 in 2003. Post issue its current paid up equity capital of Rs. 5.01 crore will stand enhanced to Rs. 5.19 crore.

On performance front, for the last three fiscals, the company has posted turnover and net profits of Rs. 59.74 cr. / Rs. 0.93 cr. (FY14) and Rs. 52.80 cr./ Rs. 0.79 cr. (FY15). For first nine months ended 31.12.15 it has posted net profit of Rs. 1.14 cr. on a turnover of Rs. 53.75 cr. If we annualized these earnings and attribute to fully diluted equity post issue, then asking price is at a P/E of 15 plus. Its peers are trading at a lower P/Es and thus making this issue a pricy bet.

On merchant banker’s front, this is 21st IPO from its stable and earlier mandates have seen some erratic movements post listing inviting suspension and the others have shown mixed trends.

Conclusion: Only risk aver investors with cash surplus may consider long term investment.


Conclusion / Investment Strategy

Only risk aver investors with cash surplus may consider long term investment.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Jun 28, 2016

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

Kwality Pharmaceuticals IPO FAQs

  1. 1. Why Kwality Pharmaceuticals IPO?

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

  2. 2. How is Kwality Pharmaceuticals IPO?

    Read the Kwality Pharmaceuticals IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Kwality Pharmaceuticals IPO what should investors do?

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

  4. 4. Is Kwality Pharmaceuticals IPO good?

    Our recommendation for Kwality Pharmaceuticals IPO is to subscribe.

  5. 5. Is Kwality Pharmaceuticals IPO worth Investing?

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

  6. 6. When will Kwality Pharmaceuticals IPO allotment status?

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

  7. 7. When will Kwality Pharmaceuticals IPO list?

    The Kwality Pharmaceuticals IPO will list on Monday, July 18, 2016, at BSE SME.








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