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Maiam Global Foods Ltd IPO Review (Avoid)

Review By Dilip Davda on Feb 15, 2014

After long wait, the primary market is having main line IPO this week. Details of the same are as under:

 

Maiam Global Foods Ltd, (MGF)is engaged in agro based products. It aims to be a global player in Agro industry with global presence. Moving forward to evolve as a pioneer company in Agro and Food industry by running a successful “Farm to Fork” strategic business with forward and backward integration plans. The Company has an integrated business model, and is engaged in to the business of trading of Pulses, Spices and Edible Oil and processing of Pulses & Spices. MGF is also engaged in agricultural business through Cultivation, Processing and Distribution of Vegetables & Fruits for commercial as well as captive use.

 

MGF has entered into the world of agro and food products by venturing into trading operations of Pulses, Spices, Edible Oil and other groceries. In the short span of time, it expanded the operations by penetrating into processing of Pulses into Dhal and Spices with installed capacity of 25,000 MT of processing Pulses. The company has also ventured into restaurant business and currently operates four restaurants under the brand 'Jeevan Your Café' in and around Chennai.

 

The company is coming out with its maiden issue of 9000000 equity share of Rs. 10 each via book building process with a price band of Rs. 58-62 and aims to mobilize around Rs. 52.20-55.80 crore based on lower and upper price bands. These funds will be utilized for setting up of new restaurants, Green House Cultivation facilities, modernization of plants and machinery and strengthening supply chain management etc. The issue opens for subscription on 20.02.14 and will close on 28.02.14. Minimum application is to be made for 200 shares and in multiples thereof, thereafter. Post this offer, its current equity capital of Rs. 9.11 crore will rise to Rs. 18.11 crore. Comfort Securities Ltd is the lead manager to the offer and Cameo Corporate Services Ltd. is the registrar to the offer. Shares will be listed on BSE. Ind-Ra has assigned this IPO “IND IPO Grade 1‟, which indicates poor fundamentals.

 

On performance front, the company has reported an average EPS of Rs. 4.61 for last three fiscals. For first six months of current fiscal it has earned net profit of Rs. 3.52 crore on a turnover of Rs. 67.02 crore indicating at annualized EPS of Rs. 7.73. Its NAV as on 30.09.13 is Rs. 27.19.  If we attribute these earnings on fully diluted equity of Rs.18.11 crore then EPS stands at Rs. 3.89. Based on this the asking price is at around 15 P/E and at a P/BV of 2.1+ making it a high priced issue.

 

On merchant banker’s front, they have poor track records.


Conclusion / Investment Strategy

Avoid

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Feb 15, 2014

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

Maiam Global Foods IPO FAQs

  1. 1. Why Maiam Global Foods IPO?

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

  2. 2. How is Maiam Global Foods IPO?

    Read the Maiam Global Foods IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Maiam Global Foods IPO what should investors do?

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

  4. 4. Is Maiam Global Foods IPO good?

    Our recommendation for Maiam Global Foods IPO is to avoid.

  5. 5. Is Maiam Global Foods IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Maiam Global Foods IPO.

  6. 6. When will Maiam Global Foods IPO allotment status?

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

  7. 7. When will Maiam Global Foods IPO list?

    The Maiam Global Foods IPO list date is not yet available. The Maiam Global Foods IPO is planned to list on [.], at BSE.