Monarch Health Services Ltd IPO Review (Avoid)

Review By Dilip Davda on May 11, 2012

Secondary market is in search of new bottom as even after postponement of GAAR by a year and few more relaxation in budgetary proposals, market did not gained and marked recent new lows. SMFL IPO failed and while we have an IPO from Plastene India via book building route, we are witnessing another small IPO daring to test the mucky waters. This is the SME platform IPO from Monarch Healthcare Services Ltd. (MHSL)

The company engaged in healthcare services related business is floating this issue with a fixed price of Rs. 40 per share and offering 3000000 equity shares of Rs. 10 each for subscription. The issue opens on 12.05.12 and will close on 16.05.12. Out of this 50% is reserved for retail investors and the balance is for promoters, promoters' group, corporate bodies and market makers. Company is mobilizing Rs. 12 crore to finance its healthcare service centres in Mumbai and other cities. As the company is new, it has not yet started any operations and hence no performance figures are available.

For this IPO minimum application is to be made for 3000 shares and in multiples thereof. Post issue, shares will be listed on BSE-SME platform. Networth Stock Broking Ltd is the sole manager as well as market maker for this IPO. Sharepro Services India Pvt. Ltd. Is the registrar to the issue.

The first such IPO of BCB Finance that got listed and having a minimum lot for trading of 4000 shares on BSE SME platform is not doing well. There too the minimum application size was of 4000 shares at an offer price of Rs. 25 per share. This is really wondering that a relatively small company floating small IPO is compelled to have a minimum lot of application ranging above Rs. 1 lakh. With this kind of minimum lot, will retail investors come forward in the given time to support SME platform? Even post listing, minimum trading lot of 3000 shares in case of this company will also make it unattractive to find new investors. With placement at premium to promoter group, NAV is boosted up to around Rs. 34.

Conclusion / Investment Strategy

Well, today's investors are really shrewd enough and understand better on such gimmicks. This IPO is only for those who have surplus funds and can wait for long to get returns from the company that has yet to start operations.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on May 11, 2012

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

Monarch Health Services IPO FAQs

  1. 1. Why Monarch Health Services IPO?

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

  2. 2. How is Monarch Health Services IPO?

    Read the Monarch Health Services IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Monarch Health Services IPO what should investors do?

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

  4. 4. Is Monarch Health Services IPO good?

    Our recommendation for Monarch Health Services IPO is to avoid.

  5. 5. Is Monarch Health Services IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Monarch Health Services IPO.

  6. 6. When will Monarch Health Services IPO allotment status?

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

  7. 7. When will Monarch Health Services IPO list?

    The Monarch Health Services IPO will list on Wednesday, May 30, 2012, at BSE SME.