Meera Industries BSE SME IPO review (Subscribe)

Review By Dilip Davda on Apr 21, 2017

Meera Industries Ltd (MIL) is engaged in the manufacturing of Yarn Twisting, Winding and Heat-Setting Machine for textile industries. All the machines are stringently tested at its in-house quality management unit to ensure the flawless performance of the machines. Moreover, various R&D activities are conducted by it to remain abreast of the latest market requirements. MIL caters to the domestic market as well as Exports the products to continents like America, South America, Africa, Europe and Asia and major countries like Germany, Spain, Turkey, Thailand, Belgium, USA etc. Company’s products are sold under the brand name “MEERA”.

To part finance purchase of additional plant and machinery, setting up of new yarn manufacturing facility, meet working capital funding and general corpus fund needs, the company is coming out with a maiden IPO of 1080000 equity share of Rs. 10 each at a fixed price of Rs. 36 per share to mobilize Rs. 3.89 crore. Issue opens for subscription on 27.04.17 and will close on 04.05.17. Minimum application is to be made for 3000 shares and in multiples thereof, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Guiness Corporate Advisors Pvt Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. It raised initial equity at par value and then issued further capital at a price of Rs. 40 and Rs. 100 per share during 2009 – 2017. It also issued bonus shares in the ratio of 1.5 share for every 1 share held in January 2017. Post issue, its current paid up equity capital of Rs. 2.85 crore will stand enhanced to Rs. 3.93 crore.

On performance front, the company has posted turnover/net profits of Rs. 7.52 cr. / Rs. 0.16 cr. (FY14), Rs. 8.01 cr. / Rs. 0.23 cr. (FY15) and Rs. 8.18 cr. / Rs. 0.49 cr. (FY 16). For first 10 months ended on 31.01.17 of the current fiscal, it has earned net profit of Rs. 0.96 crore on a turnover of Rs. 11.37 crore. If we annualized latest earnings and attribute it on the fully diluted equity post issue then the asking price is at a P/E of around 12 plus (against industry average of 7.4) and at P/BV of 2.4 plus makes it a costly offer.

On merchant banker’s front, this is the 17th mandate from its stable and last 10 listings have shown mixed trends with 4 issues quoting at discount to offer price on the day of listing.

Conclusion: Considering aggressive pricing, only risk savvy cash surplus investors may consider long term investment.

 

Meera Ind IPO review update as on 24.04.2017

First review was based on the final prospectus data and the P/E ratio was mentioned in my review based on the data of page no. 53 of the referred document. Having learnt IPO review on Chittorgarh.com, with the said P/E ratio, management clarified the matter of P/E ratio in comparison with peers in true senses (although none of the companies are in the same business, but are in similar line of business).

Following data is taken from the listing destination BSE as on 24.04.2017 eve on the basis of December 2016 working and the closing rates on the 24th of April i.e. Monday.

 Meera IPO Review


While as per first review its asking price stands at a P/E of 12 plus, the peers are trading in the range of 12.37 to 114.87 P/E and thus the issue is justifiably priced at reasonable levels.

Revised Conclusion: Based on this updated review, investors may consider investment in this issue for short to long term.

 


Conclusion / Investment Strategy

Considering aggressive pricing, only risk savvy cash surplus investors may consider long term investment.   Meera Ind IPO review update as on 24.04.2017 First review was based on the final prospectus data and the P/E ratio was mentioned in my review based on the data of page no. 53 of the referred document. Having learnt IPO review on Chittorgarh.com, with the said P/E ratio, management clarified the matter of P/E ratio in comparison with peers in true senses (although none of the companies are in the same business, but are in similar line of business). Following data is taken from the listing destination BSE as on 24.04.2017 eve on the basis of December 2016 working and the closing rates on the 24th of April i.e. Monday.   While as per first review its asking price stands at a P/E of 12 plus, the peers are trading in the range of 12.37 to 114.87 P/E and thus the issue is justifiably priced at reasonable levels. Revised Based on this updated review, investors may consider investment in this issue for short to long term.  

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Apr 21, 2017

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

Meera Industries IPO FAQs

  1. 1. Why Meera Industries IPO?

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

  2. 2. How is Meera Industries IPO?

    Read the Meera Industries IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Meera Industries IPO what should investors do?

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

  4. 4. Is Meera Industries IPO good?

    Our recommendation for Meera Industries IPO is to subscribe.

  5. 5. Is Meera Industries IPO worth Investing?

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

  6. 6. When will Meera Industries IPO allotment status?

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

  7. 7. When will Meera Industries IPO list?

    The Meera Industries IPO will list on Monday, May 15, 2017, at BSE SME.

2 Comments

Dhruva Pandey
2. Dhruva Pandey  May 4, 2017 01:39 I Like It. | Report Abuse Reply 0
accounting looks too good to be true and the company is from Gujurat so risk savvy cash surplus investors may consider...
Vimalkaria
1. Vimalkaria  May 2, 2017 22:16 I Like It. | Report Abuse Reply 0
Please Inform meera industries premium








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