Navkar Corp IPO Review (Subscribe)

Review By Dilip Davda on Aug 14, 2015

Navkar Corp Ltd (NCL) is a CFS (Container Freight Stations) operator in India with three CFSs, Ajivali CFS I and Ajivali CFS II at Ajivali and Somathane CFS at Somathane, which are strategically located in Panvel, Maharashtra, in close proximity to the JN Port, the largest container port in India. As of May 31, 2015, its CFSs had an aggregate installed handling capacity of 310,000 TEUs per annum on the basis of current infrastructure and operating equipment. The company also has a private railway freight terminal ("PFT") which allows it to load and unload cargo from container trains operating between Somathane CFS and the JN Port and to transport domestic cargo to and from inland destinations on the Indian rail network. As of May 31, 2015, it also owns and operates 516 trailers for the transportation of cargo between CFSs and the JN Port by road.

NCL can handle cargo at controlled temperatures at its temperature controlled chamber and through our 92 Reefer plug points at our CFSs. NCL is also certified to handle hazardous cargo at its Ajivali CFS II and Somathane CFS. It provides cargo storage facilities at CFSs which include a buffer yard and warehouses for the storage of cargo and also offers services such as packing, labeling/bar-coding, palletizing, fumigation and other related activities at its warehouses and customize offerings for its customers. NCL’s warehouses are spread over an aggregate area of 500,000 sq. ft., which includes a bonded warehouse of 60,782 sq. ft. and an area of 118,000 sq. ft. designated for the consolidation of less than container load ("LCL") containers. Its CFSs also have a customs facility for the examination and clearing of cargo and Somathane CFS has a unit for the inspection and approval of agricultural cargo set up by the plant and quarantine authorities of the Ministry of Agriculture, Government of India. The company also provides services for the repair and maintenance of containers and the storage of empty containers at CFSs.

NCL works with shipping lines, logistical service providers and customs house agents, importers and exporters. The leading shipping lines and customs house agents that the company works with include, United Arab Shipping Agency Company (India) Private Limited, NYK Line (India) Limited, Hyundai Merchant Marine India Private Limited, Evergreen Shipping Agency (India) Private Limited and S. Ramdas Pragji Forwarders Private Limited.

CFSs and ICDs are set up for the purposes of in-transit container handling, stuffing, de-stuffing, including temporary storage and the examination and assessment of export and import ("EXIM") cargo and are an integral part of the logistics chain in relation to the transportation of containerized cargo. A CFS is an off-dock facility located near gateway ports which helps in decongesting the port by shifting cargo and customs related activities outside port areas, while an ICD is located in the hinterland away from gateway ports acting as a hub for container cargo from different ports and used for the same functional purposes as a CFS.

To meet expenses for its Somathane CFS capacity enhancement plans, development of the non-notified area’s near its CFSs and establishment of Logistics Park at Valsad, the company is coming out with maiden IPO of approx 3.87 crore equity shares of Rs. 10 each via book building route in the price band of Rs. 147-155 to mobilize Rs. 600 crore (that includes offer for sale worth Rs. 90 crore and fresh equity issue worth Rs. 510 crore).  Issue opens for subscription on 24.08.15 and will close on 26.08.15. Minimum application is to be made for 95 shares and in multiples thereon, thereafter.

After issuing equity at par during MoA and then in the price range of Rs. 100 to Rs. 150 between 2009 to 2014 and then issued bonus shares in the ratio of 5 shares for every 1 share held in March 2015, its equity capital is at Rs. 109.71 crore that will stay enhanced to Rs. 142.60 post IPO. BRLM to this IPO are Axis Capital Ltd, Edelweiss Financial Services Ltd and SBI Capital Markets Ltd and registrar to the issue is Link Intime India Pvt Ltd. Post allotment, shares will be listed on BSE/NSE.

On performance front, on a consolidated basis the company has posted turnover and net profit of Rs. 338 cr. /Rs. 56.71 cr. (FY13), Rs. 370.18 cr. /Rs. 90.00 cr. (FY14) and Rs. 330.91 cr. /Rs. 73.13 cr. (FY15). Thus for the last fiscal, it has suffered a setback. For last three fiscals its consolidated average EPS is Rs. 7.88 on post bonus basis. Based on its FY15 earnings, asking price is at a P/E of around 23 on pre-IPO equity. On fully diluted equity on post issue basis, asking price is at a P/E of 30 against Industry’s composite P/E of around 29.

BRLMs have mixed trends for their past mandates.


Conclusion / Investment Strategy

Investment may be considered for long term as this company is likely to join the bandwagon like VRL Logi., Snowman, All Cargo, Gateway Distri, Concor etc.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Aug 14, 2015

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. Any reader taking decisions based on any information published here does so entirely at its own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

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

Navkar Corporation IPO FAQs

  1. 1. Why Navkar Corporation IPO?

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

  2. 2. How is Navkar Corporation IPO?

    Read the Navkar Corporation IPO recommendations by the leading analyst and leading stock brokers.

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  3. 3. Navkar Corporation IPO what should investors do?

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

  4. 4. Is Navkar Corporation IPO good?

    Our recommendation for Navkar Corporation IPO is to subscribe.

  5. 5. Is Navkar Corporation IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Navkar Corporation IPO.

  6. 6. When will Navkar Corporation IPO allotment status?

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

  7. 7. When will Navkar Corporation IPO list?

    The Navkar Corporation IPO will list on Wednesday, September 9, 2015, at BSE, NSE.








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