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Libas Designs NSE SME IPO review (Apply)

Review By Dilip Davda on Dec 26, 2016

Libas Designs Ltd (LDL) is engaged in the process of fabrication of fabric into apparels and other products through customization, where customers can choose the colours, fabrics and designs and make changes as per their need. Apart from retail sales, Libas also undertake wholesale business where it provides designs to other labels. It also gives complete solutions to corporates regarding their dressing needs and designing. The Company markets its product under the brand name of LIBAS RIYAZ GANGJI and it is a well-established fashion designer brand name in Mumbai. Furthermore, it has tie up with more than 80 Indian & international designers and have inventory of more than 500 Designer wear to choose. Currently, LDL has 8 stores either own or on franchisee basis. The ratio of stores and wholesale business is 42:58 as per F.Y. ended on March 31, 2016. For E-retailing our products, it has tie ups with major ecommerce players portals and have its own portal. E-retailing has enabled it to reach wide number of consumers at reduced costs, enhanced brand visibility. The Company has varieties of products namely Men’s wear – Sherwani, Suits, Indo-Western Wears, Nehru Jacket & Pants, Women Wear – Sarees, Suits, Lehenga, Gowns &Anarkalis and Accessories – Jewellery, Belts, Mojaris, Cufflinks & Safa. In Ludhiana, Company also provides beauty services. LDL also offer an extensive range of jute bags, best suited for everyday use.

To part finance setting up of 4 new stors and meet working capital and general corpus funds requirements, the company is coming out with a maiden IPO of 2000000 equity share of Rs. 10 each at a fixed price of Rs. 68 per share to mobilize Rs. 13.60 crore. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Issue opens for subscription on 27.12.16 and will close on 30.12.16. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 26.67 per cent of the post issue paid up equity capital of the company. The issue is solely managed by Sarthi Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. It has issued all equity at par since inception and has also issued bonus shares in the ratio of 2.5 share for every 1 share held in August 2016. Post issue its current paid up equity capital of Rs. 5.50 crore will stand enhanced to Rs. 7.50 crore.

On performance front, the company has posted turnover/net profits of Rs. 14.34 cr./ Rs. 0.33 cr. (FY14), Rs. 17.72 cr. / Rs. 0.35 cr. (FY15) and Rs. 21.49 cr. / Rs. 0.91 cr. (FY16). For first quarter of current fiscal it has marked net profit of Rs. 0.26 crore on a turnover of Rs. 5.20 cr. If we annualize these earnings and attribute on fully expanded equity post IPO then asking price is at a P/ E of 48 plus making it a costly bet.


On merchant banker’s front, this is the 22nd mandate from its stable and earlier mandates have shown mixed performance post listings.

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


Conclusion / Investment Strategy

Only risk aver cash surplus investors may consider long term parking.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Dec 26, 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

Libas Designs IPO FAQs

  1. 1. Why Libas Designs IPO?

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

  2. 2. How is Libas Designs IPO?

    Read the Libas Designs IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Libas Designs IPO what should investors do?

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

  4. 4. Is Libas Designs IPO good?

    Our recommendation for Libas Designs IPO is to subscribe.

  5. 5. Is Libas Designs IPO worth Investing?

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

  6. 6. When will Libas Designs IPO allotment status?

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

  7. 7. When will Libas Designs IPO list?

    The Libas Designs IPO will list on Monday, January 9, 2017, at NSE SME.