MITCON Consultancy & Engineering Services Ltd IPO Review (Avoid)

Review By Dilip Davda on Oct 14, 2013

After three SME Emerge IPOs with book building process, NSE is having first fixed priced SME listing IPO from MITCON.

 

MITCON Consultancy & Engineering Services Ltd. (MCESL)  is an ISO 9001:2008 certified company, having its headquarter at Pune with pan India presence through its regional offices at Mumbai, New Delhi, Ahmedabad, Chennai, Bangalore and Nagpur which are equipped with high speed communication network with state of the art infrastructure. MCESL shareholders include private sector banks, nationalized banks, financial institutions and state government development corporations.

 

 Over the last three decades, the company gained proficiency in providing corporate solutions in power, energy efficiency, renewable energy, climate change and environmental management sectors. Over the years, it has diversified into providing services to banking, infrastructure and biotechnology sectors. It provides solutions to its clients depending on their requirements inter alia including feasibility studies, detailed project reports, techno economic feasibility reports, financial syndication, lender’s engineer services, Environment Impact Assessment (EIA), basic and detailed engineering, bid process management, project management, cluster development, technical/ financial restructuring, energy audits, corporate debt restructuring, valuations , due diligence, qualitative and market research, assets/ business valuation and consultation services in wind power project registration. The company also conducts IT based training courses and skill based training programs.  

 

MITCON has more than 200 employee base and provide services to small and medium enterprises (SME’s), large corporates, banks, financial institutions and various government organizations. With nine divisions and dedicated workforce, MITCON prides itself in providing the best assistance to existing & new entrepreneurs. With a comprehensive and clear understanding of businesses across segments, MITCON's goal is to integrate environmentally responsible consulting into the framework of every client's project to maximize value and reduce the environmental footprint. It is committed to contributing to the economic and environmental growth of the society.

 

To acquire offices in other metros to expand its business and to furnish new offices and buying lab equipments and general corpus funds, the company is offering 4100000 equity share of Rs. 10 each at a fixed price of Rs. 61 per share to mobilize Rs. 25.01 crore. Issue opens for subscription on 15.10.13 and will close on 18.10.13. As usual, being Emerge SME IPO, it has opted for grading of IPO. CRISIL has given IPO grade 4 to this IPO that indicates superior fundamentals of the company.  Issue is lead managed by IDBI Capital Market Services Ltd and Keynote Corporate Services Ltd. Link Intime India Pvt. Ltd. is the registrar to the issue. Post this issue, its existing equity of Rs. 8 crore will rise to Rs. 12.10 crore. Minimum application is to be made for 2000 shares and in multiples thereof, thereafter. Post allotment the shares will be listed on NSE Emerge (SME). The company has issued two bonus shares so far (3 for 2 in 2007) and (15 for 1 in 2013).

 

For last three fiscals ended 31.03.13, the company has posted an average EPS of Rs. 12.57 on an equity base of Rs. 8 crore (i.e. on the paid up capital after 15 for 1 bonus of June 2013). Its RoNW has been sliding down for past three years. Its NAV before this IPO is at Rs. 60.40. If we attribute the earnings on enhanced equity post this issue, then the EPS stands at around Rs. 8 and thus the asking price is at a P/E of 7.5+ and at a P/BV of 1. There has been no progress in the top and bottom-lines of the company for past three years.   


Conclusion / Investment Strategy

On merchant banker’s front, IDBI Capital has third mandate for NSE SME IPO whereas Keynote has second and looking at past track record of SME IPOs, the average performance of all listings on NSE Emerge so far is not auguring well for this IPO.

 

Avoid

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Oct 14, 2013

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

MITCON Consultancy IPO FAQs

  1. 1. Why MITCON Consultancy IPO?

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

  2. 2. How is MITCON Consultancy IPO?

    Read the MITCON Consultancy IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. MITCON Consultancy IPO what should investors do?

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

  4. 4. Is MITCON Consultancy IPO good?

    Our recommendation for MITCON Consultancy IPO is to avoid.

  5. 5. Is MITCON Consultancy IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the MITCON Consultancy IPO.

  6. 6. When will MITCON Consultancy IPO allotment status?

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

  7. 7. When will MITCON Consultancy IPO list?

    The MITCON Consultancy IPO will list on Friday, November 1, 2013, at NSE SME.








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