Oceanic Foods BSE SME IPO review (May apply)

Review By Dilip Davda on Mar 15, 2017

Oceanic Foods Ltd (OFL) is engaged in manufacturing of dehydrated food products. It exports dehydrated vegetables to various countries around the globe. Its products are internationally certified by US FDA, Kosher and Halal and are domestically certified by FSSAI, and APEDA. OFL currently have two manufacturing units spread over more than 5 acres in aggregate. Unit I is situated at Lalpur, Jamnagar spread over 5 acres and Unit II situated at Jamnagar spread over half acre. Unit I is an automated plant where primary process of dehydration is carried out at Unit I which includes peeling, washing, slicing and steam drying. Unit II carries out Secondary Process of Dehydration which includes oven drying and toasting. The company has an in-house Laboratory for testing the quality of our products.

To part finance its working capital and general corpus fund needs, the company is coming out with a maiden IPO of 1000000 equity share of Rs. 10 each at a fixed price of Rs. 65 per share to mobilize Rs. 6.50 crore. Issue opens for subscription on 20.03.17 and will close on 22.03.17. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Issue is solely lead managed by Pantomath Capital Advisors Pvt Ltd and Link Intime India Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE SME. Having issued all equity at par in 1993 and 1995, it also issued bonus shares in the ratio of 10 for 1 in January 2016. Post issue its current paid up equity capital of Rs. 2.75 crore will stand enhanced to Rs. 3.75 crore.

On performance front, the company has posted turnover/net profits of Rs. 50.24 cr. / Rs. 1.22 cr. (FY13), Rs. 71.53 cr. / Rs. 1.30 cr. (FY14), Rs. 81.34 cr. / Rs. 1.23 cr. (FY15) and Rs. 62.84 cr. / Rs. 1.70 cr. (FY16). For the first half of the current fiscal it has posted net profit of Rs. 0.37 cr. on a turnover of Rs. 39.76 cr. If we annualize the latest earnings and attribute it on fully diluted equity post issue then asking price is at a P/E of around 32 plus and at 1.7 P/BV making it highly priced offer. The company has faced set back in last two years as indicated by the performance.

On merchant banker’s front, this is 38th mandate from its stable and past mandates have shown mixed trends.

Conclusion: As the issue is aggressively priced, only risk savvy cash surplus investors may consider investment for long term.

Conclusion / Investment Strategy

As the issue is aggressively priced, only risk savvy cash surplus investors may consider investment for long term.

Review By Dilip Davda on Mar 15, 2017

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

Oceanic Foods IPO FAQs

  1. 1. Why Oceanic Foods IPO?

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

  2. 2. How is Oceanic Foods IPO?

    Read the Oceanic Foods IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Oceanic Foods IPO what should investors do?

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

  4. 4. Is Oceanic Foods IPO good?

    Our recommendation for Oceanic Foods IPO is to subscribe for long term.

  5. 5. Is Oceanic Foods IPO worth Investing?

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

  6. 6. When will Oceanic Foods IPO allotment status?

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

  7. 7. When will Oceanic Foods IPO list?

    The Oceanic Foods IPO will list on Friday, March 31, 2017, at BSE SME.