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Review By Dilip Davda on December 23, 2014
NCML Industries Limited (NCML) is one of the flagship Company of NCML group that has a total annual turnover of Rs. 2750 crore plus for the fiscal concluded. It ventured into the business of edible oils way back in 2000 and currently has four brands for its products- “MAANIK” for Soya-bean oil, “SHAN” for Palm oil and “MOTI” – “PEARL” for Mustard oil with a total capacity of 600 TPD refining. It also ventured into wind mill power generation. NCML is currently north centric edible oil company and now plans to expand its footprint on PAN India basis. It has enhanced its manufacturing revenues and lowered trading volumes in past three years.
In order to get its scrip listed on BSE and NSE the company is coming out with an offer for sale of 6000000 equity share of Rs. 10 each via book building process. The offer has price band of Rs. 100-120 and thus the company will mobilize around Rs. 60-72 crore that will go to the existing stakeholders. Issue opens for subscription on 29.12.14 and will close on 02.01.2015. Minimum application is to be made for 125 shares and in multiples thereon, thereafter. This offer has received “IPO Grading 3” from ICRA indicating “average fundamentals” of the company. Issue is solely managed by Corporate Strategic Allianz Ltd and Satellite Corporate Services Pvt Ltd is the registrar to the issue. The offer constitutes 25.48% dilution of equity.
On performance front, on consolidated basis , NCML has clocked in net profit of Rs.6.64 crore on a turnover of Rs. 881.70 crore for three months ended 30.06.14. For earlier two fiscals on consolidated basis it has posted an average EPS of Rs. 22.31. The nature of business of the company is high volume, low margin kind and is in FMCG sector. Based on Q1 of current fiscal earnings if we attribute it on annualized basis on the current equity, then the asking price is at a P/E of 8.87 to 10.6 based on lower and upper price band. Company’s current equity is of Rs. 23.55 crore that consists two bonus issues made in the month of October 2010 in the ratio of 3 for 1 (on 10.10.10) and then 1 for 2(on 31.10.10) and preferential equity issued at a price of Rs. 125 a share during March 2009 – March 2012 as well as at a price of Rs. 90 per share in July-Sept 2012. This has helped it to register NAV of Rs. 133 plus as on 31.3.14 that went up to Rs. 136 plus as on 30.06.14. Thus on P/BV it is just below 1. Thus offer is below industry composite P/E of 13 and looks reasonable, but IPO grade 3 indicating average fundamentals looms large. This IPO has neither safety net nor any discount for retail investors.
As far as BRLM is concerned, this is 6th mandate from it. Earlier five mandates have mixed performance.
Cash surplus investors may consider modest investment at lower price band for long term.
(Disclaimer: Author has no plans to invest in this IPO)
Review By Dilip Davda on December 23, 2014
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 the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their 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.
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 NCML Industries Ltd offers an early investment opportunity in NCML Industries Ltd. A stock market investor can buy NCML Industries IPO shares by applying in IPO before NCML Industries Ltd shares get listed at the stock exchanges. An investor could invest in NCML Industries IPO for short term listing gain or a long term.
Read the NCML Industries IPO recommendations by the leading analyst and leading stock brokers.
NCML Industries IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the NCML Industries IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for NCML Industries IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the NCML Industries IPO.
The NCML Industries IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit NCML Industries IPO allotment status to check.
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