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Review By Dilip Davda on March 19, 2013
When BSE is all out to raise its SME IPO tally (total 22 till going to press) , it appears NSE too is on the similar mode and has an IPO for its Emerge (SME) platform candidate offering equity on 25.03.13. The company is Opal Luxury Time Products Ltd. planning mobilization of Rs. 13 crore via book building route IPO. This is the third IPO for NSE Emerge listing for the concluding fiscal. Opal Luxury is a premium home décor products manufacturing and marketing company. Currently, it designs and manufactures wall and table clocks and market them under two brands: 'Opal' 'Caliber'. It offers a large & diverse range of clocks at various price points across budget, mid-level and premium styles. As on December 2012, it had 109 styles of clocks under our 'OPAL' brand with MRP starting from Rs. 1450 and going up to Rs. 27500 with an average MRP of Rs. 4275 and a median MRP of Rs. 3750. For the second Brand 'Caliber' it had 31 styles of clocks with average MRP of Rs. 370. Opal has a manufacturing facility in the industrial area of Roorkee, Uttarakhand. It primarily operates in the market of premium clocks, with in-house expertise in designing complemented by quartz technology.
Brand 'Opal' has a wide presence with the products marketed by a network of 9 distributors, 242 dealers and 91 organized retailers which include popular brands such as Shoppers Stop, Home Town, etc. The company has also ventured into online sales by way of popular online shopping portals and currently have tie ups with 10 online portals and also have its own shopping portal at www.opalclocks.com. Opal has recently started exporting both our brands, 'Opal' and 'Caliber', to the United States. To augment its Rs. 15 crore investments in Moulds, tools and equipment, and Indigenization of the designs for expansion of the existing manufacturing facility and enhancement of its brand through advertising and other brand building activities along with General corporate purposes fund raising plans, it is coming out with an IPO of (*) equity share of Rs. 10 each with a book building process within a price band of Rs. 130-135. Issue opens for subscription on 25.03.13 and will close on 28.03.13. Minimum application is to be made for 1000 shares and in multiples thereof, thereafter. Post allotment of the shares, it will be listed on NSE Emerge (SME) platform. The company has already raised Rs. 2 crore by way of pre-IPO placement at a price of Rs. 110 and thus the net offer is for Rs. 13 crore. IDBI Capital Market Services Ltd. is the sole BRLM and Karvy Computershare Pvt. Ltd. is the registrar to the issue. CRISIL Limited has assigned the 'CRISIL SME Fundamental Grade 4' to this IPO indicating 'Superior fundamentals' of the company.
On the company's performance front, for last three fiscal's average EPS of Rs. 65.99 has drastically fall to Rs. 6.29 (not annualized) for first six months of the current fiscal. Due to preferential allotment of over 20.7 lakh shares in a price range of Rs. 10-23.88 during November 2010-2011 its equity has gone up to Rs. 2.36 crore. Before this, on 02.03.2009 it allotted 5100 shares at a price of Rs. 1932 per share and issued bonus in the ratio of 4 shares for every 1' share held on 23.03.2009. NAV stood at Rs. 54.31 (as on 31.03.12) and Rs. 60.59 (as on 30.09.12). There are no listed peers to compare this company's performance. Post IPO the equity capital will rise to around Rs. 3.36 crore and if we attribute its first half net profit of Rs. 1.37 crore on a turnover of Rs. 9.57 crore, the asking price is at a P/E of about 16 which makes it a costlier bet. Further when the pre-IPO placement is done at a price of Rs. 110 on 13.03.13, there is no reason to hike the price band to Rs. 130-135.
As far as BRLM's mandate performance is concerned, this is the second SME platform IPO from it, and the first one (Thejo Engg.) has failed to give any return to investors so far. On overall basis, there were 19 mandates out of which nine IPOs failed to give listing gains from this BRLM.
Remarks; Considering the entry barrier and the poor performance of over 75% SME IPOs post listing despite market making efforts, it is better to skip.
Review By Dilip Davda on March 19, 2013
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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. 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 their own risk. The above information is based on information available as of date coupled with market perceptions. 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 Opal Luxury Time Products Ltd offers an early investment opportunity in Opal Luxury Time Products Ltd. A stock market investor can buy Opal Luxury Time Products IPO shares by applying in IPO before Opal Luxury Time Products Ltd shares get listed at the stock exchanges. An investor could invest in Opal Luxury Time Products IPO for short term listing gain or a long term.
Read the Opal Luxury Time Products IPO recommendations by the leading analyst and leading stock brokers.
Opal Luxury Time Products IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Opal Luxury Time Products IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Opal Luxury Time Products IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Opal Luxury Time Products IPO.
The Opal Luxury Time Products IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Opal Luxury Time Products IPO allotment status to check.
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