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Review By Dilip Davda on December 18, 2017
Moksh Ornaments Ltd. (MOL) is in the business of manufacture and wholesale of jewellery and head quartered at Mumbai, Maharashtra. The jewelleries are manufactured on job work basis at Kolkata and Mumbai. MOL primarily sells gold jewellery and its product profile includes bangles, chain, and mangalsutra. Its focus is on developing new designs that meet customer’s requirements as well as cater to their tastes and specifications. It offers regular designs and guarantee esteemed customers for the time bound delivery of the products. Company procures the required gold from various banks and local markets.
To part finance its repayment of certain loans, working capital and general corpus fund needs, MOL is coming out with a maiden IPO of 2982000 equity shares of Rs. 10 each at a fixed price of Rs. 37 per share to mobilize Rs. 11.03 crore. Issue opens for subscription on 21.12.17 and will close on 26.12.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue constitutes 27.79% of the post issue paid up capital of the company. Issue is solely lead managed by Guiness Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. The average cost of acquisition of equity shares by the promoters is Rs. 9.67 per share. Having raised initial equity on incorporation at par, it raised further equity at a price of Rs. 15 per share in December 14 and August 15. It also issued bonus shares in the ratio of 1 for 2 in August 2017. Post issue, its current paid up equity capital of Rs. 7.75 crore will stand enhanced to Rs. 10.73 crore.
On performance front, MOL has reported turnover/net profits of Rs. 80.95 cr. / Rs. 0.13 cr. (FY14), Rs. 110.91 cr. / Rs. 0.17 cr. (FY15), Rs. 143.01 cr. / Rs. 0.15 cr. (FY16) and Rs. 239.93 cr. / Rs. 2.87 cr. (FY17), Thus sudden rise in top and bottom lines for FY 17 is surprising. For the first seven months of the current fiscal ended on 31.10.17 it has posted net profit of Rs. 1.89 crore on a turnover of Rs. 169.43 crore. For past three fiscals it has posted an average EPS of Rs. 3.23 and an average RoNW of 14.86% on an equity base of Rs. 5.17 crore. Issue is priced at a P/BV of 2.25 on the basis of its NAV as on 31.10.17 and at a P/BV of 1.77 on the basis of post issue NAV. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 12 plus against industry average of 42 plus and peers trading at a P/E of around 34 (PCJ), 46 (Thangamayl) and 42 (TBZ) {as on 18.12.17}.Thus issue pricing appears reasonable.
On merchant banker’s front, this is the 21st mandate from its stable in past three years. Out of last 10 listings, 3 opened at a discount, 2 at par and the rest at a premium ranging from 5% to 20% to offer price on the day of listing.
Conclusion: Considering reasonable pricing, moderate investment may be considered for medium to long term. (Subscribe).
Review By Dilip Davda on December 18, 2017
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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. 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 their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About 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.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of Moksh Ornaments Limited offers an early investment opportunity in Moksh Ornaments Limited. A stock market investor can buy Moksh Ornaments IPO shares by applying in IPO before Moksh Ornaments Limited shares get listed at the stock exchanges. An investor could invest in Moksh Ornaments IPO for short term listing gain or a long term.
Read the Moksh Ornaments IPO recommendations by the leading analyst and leading stock brokers.
Moksh Ornaments IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Moksh Ornaments IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Moksh Ornaments IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Moksh Ornaments IPO.
The Moksh Ornaments IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Moksh Ornaments IPO allotment status to check.
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