Mitsu Chem Plast BSE SME IPO review (Subscribe)

Review By Dilip Davda on Aug 21, 2016

Mitsu Chem Plast Ltd (MCPL) is an ISO 9001:2008 and ISO TS/16494 (Unit – III) certified polymer based molded products manufacturing company, engaged in the business of manufacturing and marketing of technically driven innovative products catering to growing industry segments like, Industrial Packaging Solutions, Lifestyle Products, Automotive Components, Healthcare Products, Infrastructure related products &Emergency Handling Solutions. MCPL's products are manufactured under brand "Mitsu" and the same are sold to various intermediary companies who, after minor value additions and / or modifications supply to various Automobile companies.

For listing of its shares on BSE SME platform, the company is coming out with a maiden offer for sale of 1000800 equity shares of Rs. 10 each at a fixed price of Rs. 95 per share to mobilize Rs. 9.51 crore. Issue opens for subscription on 26.08.16 and will close on 31.08.16. Minimum application is to be made for 1200 shares and in multiples thereon, thereafter. The Offer will constitute 28.39% of the post-Offer paid-up Equity Share capital of the Company. The cost of acquisition of shares by the promoters is Rs. 2.46 per share.

Issue is solely managed by Aryaman Financial Services Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. It raised equity at par most of the time except few shares issued at a price of Rs. 50 per share in February 2008 (based on Rs. 10 paid up value). It has also issued bonus shares in the ratio of 2 for 1 in November 2006 and 3 for 2 in June 2016. Being offer for sale, no fund is coming to company and paid up equity remains same at Rs. 3.53 crore. In the past three (3) years its turnover /net profits were Rs. 70.73 cr. / Rs. 1.63 cr. (FY 14), Rs. 88.24 cr. / Rs. 0.76 cr. (FY 15) and Rs. 89.24 cr. / Rs. 1.91 cr. (FY16). If we attribute the latest earnings on the latest paid up capital then asking price is at a P/E of 17 plus against industry average of 22. Thus this IPO appears to have been priced reasonably.

On merchant banker's front, this is the 11th IPO from its stable and earlier IPOs have shown mixed trends.

Conclusion: Investors may consider investment for long term.


Conclusion / Investment Strategy

Investors may consider investment for long term. The asking price is at a P/E of 17 plus against industry average of 22. Thus this IPO appears to have been priced reasonably.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Aug 21, 2016

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 prior to making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well informed investors to participate is such offers. With crazy recent listings, SME IPOs have started drawing attention of investors across the board. However, as SME issues have entry barriers and continued low preference from broking community, any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on information available as on date coupled with market perceptions. 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

Mitsu Chem Plast IPO FAQs

  1. 1. Why Mitsu Chem Plast IPO?

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

  2. 2. How is Mitsu Chem Plast IPO?

    Read the Mitsu Chem Plast IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Mitsu Chem Plast IPO what should investors do?

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

  4. 4. Is Mitsu Chem Plast IPO good?

    Our recommendation for Mitsu Chem Plast IPO is to subscribe.

  5. 5. Is Mitsu Chem Plast IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Mitsu Chem Plast IPO.

  6. 6. When will Mitsu Chem Plast IPO allotment status?

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

  7. 7. When will Mitsu Chem Plast IPO list?

    The Mitsu Chem Plast IPO will list on Friday, September 9, 2016, at BSE SME.

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