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Mangalam Seeds Ltd - BSE SME IPO review (Apply)

Review By Dilip Davda on Jul 24, 2015

Mangalam Seeds Ltd (MSL) is engaged in producing and delivering high quality seeds by use of agriculture generic techniques and is the most preferred seed brand in India in major crops like cumin seeds, castor seeds, fennel seeds, lucerene seeds, sesame seeds, fodder bajra seeds etc. The company is offering a wide range of seeds categorized as 'research seeds' and 'hybrid seeds'. It has a collection of around 976 varieties of germplasm in various crops and its products are marketed under the brand names like Eklavya, Volina, Leetos, Juddo etc. It has obtained 15 trademarks and has already applied for 65 other brand names and logos.  It has its own R & D facility and a strong marketing channel. It has set a target to be PAN India Company and expand its horizons from Gujarat and Rajasthan regions. 

To achieve the benefits of listing and raising general corpus fund, the company is coming out with a maiden IPO of 1140000 equity shares of Rs. 10 each at a fixed price of Rs. 50 per share to mobilize Rs. 5.70 crore. Issue opens for subscription on 29.07.15 and will close on 31.07.15. Minimum application is to be made for 3000 and in multiples thereon, thereafter. Sole manager to this issue is Pantomath Capital Advisors Pvt Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE SME.  After incorporation equity issue at par, it issued further capital at a price of Rs. 100 per share in February 2004 and March 2014 and then at a price of Rs. 50 per share in March and May 2015. It has also issued bonus shares twice, 5 for 2 in March 2015 and 13 for 6 in May 2015. It's paid up equity of Rs. 0.93 crore rose to Rs. 3.16 crore with preferential issue at Rs. 50 per share as well as a bonus issue in the month of May 2015. Post IPO its current paid up equity capital of Rs. 3.16 crore will stand enhanced to Rs. 4.30 crore.

On performance front, for last three fiscals the company has posted turnover and net profits of Rs. 11.85 crore/Rs. 0.10 crore (FY 2013), Rs. 14.83 crore/Rs. 0.12 crore (FY 2014) and Rs. 17.03 crore/Rs. 1.20 crore (FY 2015) with an average EPS of Rs. 2.63 for last three fiscals. In FY 2015 it shifted its focus on agriculture activity that had a lion share in revenues (Rs. 12.60 crore).  Based on 31.3.15 equity the asking price at a P/E of 10 plus, but if we attribute the FY 2015 earnings on fully diluted equity post IPO, then the asking price is at a P/E of around 18, that augurs well against industry average of 42.

On sole lead manager's front, this is the 12th IPO from its stable and past mandates have good track records.


Conclusion / Investment Strategy

A long term bet. the asking price is at a P/E of around 18, that augurs well against industry average of 42.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Jul 24, 2015

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

Mangalam Seeds IPO FAQs

  1. 1. Why Mangalam Seeds IPO?

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

  2. 2. How is Mangalam Seeds IPO?

    Read the Mangalam Seeds IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Mangalam Seeds IPO what should investors do?

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

  4. 4. Is Mangalam Seeds IPO good?

    Our recommendation for Mangalam Seeds IPO is to subscribe.

  5. 5. Is Mangalam Seeds IPO worth Investing?

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

  6. 6. When will Mangalam Seeds IPO allotment status?

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

  7. 7. When will Mangalam Seeds IPO list?

    The Mangalam Seeds IPO will list on Wednesday, August 12, 2015, at BSE SME.