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Review By Dilip Davda on December 1, 2017
MRC Exim Ltd. (MRC) is engaged in the business of trading of various industrial, metals and alloy products including iron and steel. MRC is a multi-product trading company with a diverse product portfolio. It is currently serving the corporate and other clients from fabrication and manufacturing industry.
To part finance its working capital and general corpus fund needs, MRC is coming out with a maiden IPO of 3000000 equity shares of Rs. 10 each at a fixed price of Rs. 15 per share to mobilize Rs. 4.50 crore. Issue opens for subscription on 06.12.17 and will close on 08.12.17. Minimum application is to be made for 8000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Inventure Merchant Banker Services Pvt. Ltd. and Purva Sharegistry India Pvt. Ltd. is the registrar to the issue. Issue constitutes 28.79% of the post issue paid up capital of the company. Having issued initial equity at par, it raised further equity at a price of Rs. 25 per share between March 2016 and March 2017 and has also issued bonus shares in the ratio of 3 for 2 in August 2017. Post issue, its current paid up equity capital of Rs.7.42 crore will stand enhanced to Rs.10.42 crore. Average cost of acquisition by promoters ranging from Rs. 9.77 to Rs. 10 per share.
On performance front, MRC has reported turnover/net profits of Rs. 4.09 cr. / Rs. 0.01 cr. (FY16) and Rs. 16.70 cr. / Rs. 0.12 cr. (FY17). For H1 of current fiscal it has posted net profit of Rs. 0.05 cr. on a turnover of Rs. 9.07 cr. For last two and half fiscals it has reported an average EPS of Rs. 0.42 per share and average RoNW of 5.25%. Issue is priced at a P/BV of 1.48 on the basis of NAV as on 30.09.17 and at a P/BV of 1.30 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 150 against industry average of 66. Thus issue is priced exorbitantly.
On merchant banker’s front, this is the 4th mandate from its stable and last three listings after opening at a premium, close at a discount to offer price on the day of listing.
Conclusion: Investors may give this highly priced issue with dismal performance a miss. (Avoid)
Review By Dilip Davda on December 1, 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 MRC Exim Limited offers an early investment opportunity in MRC Exim Limited. A stock market investor can buy MRC Exim IPO shares by applying in IPO before MRC Exim Limited shares get listed at the stock exchanges. An investor could invest in MRC Exim IPO for short term listing gain or a long term.
Read the MRC Exim IPO recommendations by the leading analyst and leading stock brokers.
MRC Exim IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the MRC Exim IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for MRC Exim IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the MRC Exim IPO.
The MRC Exim IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit MRC Exim IPO allotment status to check.
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