M and B Switchgears Ltd IPO Review (Avoid)

Review By Dilip Davda on Sep 24, 2011

M and B Switchgears Ltd.(MnB): The company is promoted by Mundra family. It is engaged in manufacturing of distribution transformers, power transformers, furnace/rectifier transformers and special purpose transformers. Company is in this business for more than 30 years and is a preferred supplier of quality transformers. Existing annual production capacity of the company is in terms of KVA is 75,000 KVA of transformer per month on single shift basis and annual aggregate capacity is 9,00,000 KVA per annum. It has capacity to manufactures 5,109 transformers per annum. MnB's  client base include almost all electricity boards, reputed industrial groups which include steel, power, pharma, textile, automobile etc., public sector companies like NCL, SECL, WCL, Ordanace factory & various other government utilities.

Now the company is planning to set up new grid connected to 4MWp solar photovoltaic power plant and to raise general corpus fund. To part finance this, the company is coming out with a book building process IPO of 5000000 equity share of Rs. 10 each within a price band of Rs. 180-186. The issue opens for subscription on 28.09.11 and closes on 05.10.11. Minimum application is to be made for 30 shares and in multiples thereafter.

D & A Financial Services Private Limited is the sole BRLM while Bigshare Services Pvt Ltd. is the registrar to the issue. Shares will be listed on BSE and NSE. ICRA has assigned IPO Grade 2 to this issue indicating at Below Average Fundamentals of the company.

As far as BRLM is concerned, it brought two IPOs in the recent past and both have failed to give positive returns on the debut day to investors. The recent one being Brookes Labs Ltd.

On financial front, the company posted net profit of Rs. 0.79 crore on a turnover of Rs. 33.99 crore for the fiscal 2010-11 that gives an EPS of Rs. 0.04 per share at the lower price band and thus asking price is exorbitant and is also at a  18 P/BV.


Conclusion / Investment Strategy

Avoid. the company posted net profit of Rs. 0.79 crore on a turnover of Rs. 33.99 crore for the fiscal 2010-11 that gives an EPS of Rs. 0.04 per share at the lower price band and thus asking price is exorbitant and is also at a 18 P/BV.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Sep 24, 2011

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. Any reader taking decisions based on any information published here does so entirely at its own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

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

M and B Switchgears IPO FAQs

  1. 1. Why M and B Switchgears IPO?

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

  2. 2. How is M and B Switchgears IPO?

    Read the M and B Switchgears IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. M and B Switchgears IPO what should investors do?

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

  4. 4. Is M and B Switchgears IPO good?

    Our recommendation for M and B Switchgears IPO is to avoid.

  5. 5. Is M and B Switchgears IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the M and B Switchgears IPO.

  6. 6. When will M and B Switchgears IPO allotment status?

    The M and B Switchgears IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit M and B Switchgears IPO allotment status to check.

  7. 7. When will M and B Switchgears IPO list?

    The M and B Switchgears IPO will list on Thursday, October 20, 2011, at BSE, NSE.
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