Nandani Creation NSE SME IPO review (Avoid)

Review By Dilip Davda on Sep 26, 2016

Nandani Creation Ltd (NCL) is engaged in manufacturing and marketing of women apparels like kurtis, sarees, ethnic tops, palazzo, Patiala salwar suits, dupattas, quilted jackets, dress materials etc. All these products are sold under its brand name “Jaipurkurti.com”. NCL distributes its products by following e-retail model and has developed necessary infra for it. The company aims to expand its operations on PAN India basis in coming years.

To meet its working capital and general corpus fund requirements, the company is coming out with a maiden IPO of 1444000 equity share of Rs. 10 each at a fixed price of Rs. 28 per share to mobilize Rs. 4.04 crore. Issue opens for subscription on 28.09.16 and will close on 03.10.16. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge platform. Issue is jointly lead managed by Pantomath Capital Advisors Pvt Ltd and Indian Overseas Bank. Bigshare Services Pvt Ltd is the registrar to the issue. Having issued equity at par in 2012 and 2014, it issued bonus in the ratio of 5 for 1 on 11.05.16 and then converted shares at a price of Rs. 20 per share on 13.05.16 as well as on 01.08.16. Then it issued few more shares at Rs. 28 per share on 20.08.16. Its current paid up equity capital of Rs. 1.51 cr. will stand enhanced to Rs. 2.95 cr. post this issue.

On performance front, for the last four fiscals, the company has posted turnover /net profit of Rs. 0.59 cr. / Rs. 0.001 cr. (FY13), Rs. 1.90 cr. / Rs. 0.01 cr. (FY14). Rs. 4.82 cr. / Rs. 0.01 cr. (FY15) and Rs. 14.20 cr. / Rs. 0.20 cr. (FY16). Thus it has posted rise in top and bottom line. If we attribute latest earnings on fully diluted equity post IPO then asking price is at a P/E of 41 plus and at a P/BV of 2.56, thus making it a highly priced offer. Industry average P/E is at 15 as claimed by it in prospectus.

On merchant banker’s front, this is the 25th mandate from Pantomath whereas 1st from IOB. Pantomath has shown mixed trends for its past mandates on listings.

Conclusion: Being highly priced offer, only cash surplus risk savvy investors may park funds for long term, others may give it a miss.


Conclusion / Investment Strategy

Being highly priced offer, only cash surplus risk savvy investors may park funds for long term, others may give it a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Sep 26, 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 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

Nandani Creation IPO FAQs

  1. 1. Why Nandani Creation IPO?

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

  2. 2. How is Nandani Creation IPO?

    Read the Nandani Creation IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Nandani Creation IPO what should investors do?

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

  4. 4. Is Nandani Creation IPO good?

    Our recommendation for Nandani Creation IPO is to avoid.

  5. 5. Is Nandani Creation IPO worth Investing?

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

  6. 6. When will Nandani Creation IPO allotment status?

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

  7. 7. When will Nandani Creation IPO list?

    The Nandani Creation IPO will list on Monday, October 10, 2016, at NSE SME.








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