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Narayani Steel BSE SME IPO Review (May apply)

Review By Dilip Davda on Aug 30, 2016

Narayani Steel Ltd (NSL) is engaged in trading and manufacturing of hot rolled long products of value added steel. The company primarily trades in blooms, TMT Bars, billets, pellets etc and also manufactures TMT bars and other long products such as rounds, flats, angles, channels etc. Company aims to grow on PAN India basis and make its brand a distinguished name in the industry.

To part finance its working capital requirements and generate corpus funds, the company is issuing 3600000 equity shares of Rs. 10 each at a fixed price of Rs.32 per share to mobilize Rs. 11.52 crore. Issue opens for subscription on 01.09.16 and will close on 06.09.16. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Having issued equity at par during 1995 to 2008, it further issued equity at a price of Rs. 25 to Rs. 100 per share between 2011 and 2013. Its current paid up equity capital of Rs. 7.31 crore will stand enhanced to Rs. 10.91 crore post issues. Post allotment shares will be listed on BSE SME. Issue is lead managed by Pantomath Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue.

On performance front, for last four fiscals, the company has posted turnover/net profit of Rs. 475.92 cr. / Rs. 1.16 cr. (FY13), Rs. 580.25 cr. / Rs. 1.59 cr. (FY14), Rs. 599.96 cr. / Rs. 1.55 cr. (FY15) and Rs. 504.07 cr. / Rs. 1.39 cr. (FY16). It has suffered a setback for last fiscal. If we attribute the latest earnings on the fully diluted equity capital then asking price is at a P/E of 25 plus against 20 or below of its peers thus making it a pricy bet. However, the issue price is below 1 P/BV.

On merchant banker’s front, this is the 24th issue from its stable and it has mixed trends for its past mandates.

Conclusion: Pricing of the issue is on the higher side with nothing on tables for new investors. However, cash surplus risk savvy investors may consider it for long term investment; other may give it a miss.


Conclusion / Investment Strategy

Pricing of the issue is on the higher side with nothing on tables for new investors. However, cash surplus risk savvy investors may consider it for long term investment; other may give it a miss.

Review By Dilip Davda on Aug 30, 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

Narayani Steels IPO FAQs

  1. 1. Why Narayani Steels IPO?

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

  2. 2. How is Narayani Steels IPO?

    Read the Narayani Steels IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Narayani Steels IPO what should investors do?

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

  4. 4. Is Narayani Steels IPO good?

    Our recommendation for Narayani Steels IPO is to subscribe for long term.

  5. 5. Is Narayani Steels IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Narayani Steels IPO.

  6. 6. When will Narayani Steels IPO allotment status?

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

  7. 7. When will Narayani Steels IPO list?

    The Narayani Steels IPO will list on Wednesday, September 14, 2016, at BSE SME.