PG Electroplast Limited IPO Review (Avoid)

Review By Dilip Davda on Sep 5, 2011

PG Electroplast Ltd. is a flagship company of the Gupta group from north and is engaged in a variety of consumer durable products and related accessories along with its assemblies.

The company that started with black and while TV component manufacturing ventured into TV set assemblies on contract basis and paved the way for making of CTVs and other products like CFL, DVDs, Water Purifiers, AC and PCB assemblies/sub-assemblies.

Currently it has four units at UP, Uttarakhand and Maharashtra region and enjoys the status of Electronic Manufacturing Service provider to majors OEMs in India. The company is now planning to expand its 3rd and 4th unit along with repayment of high cost debt and raise general corpus fund.

To part-finance these, it is offering 5745000 equity share of Rs. 10 each within a price band of Rs. 190-210. The company will generate Rs. 109.15 crore to Rs. 120.64 crore on the basis of lower and the upper price band. The issue opens for subscription on September 7 and closes on September 12. Post issue, shares will be listed on BSE and NSE. CARE has assigned IPO grade 3 to this IPO indicating average fundamentals of the company. Minimum application is to be made for 30 shares and in multiples thereof.

Almondz Global Securities Ltd. is the sole BRLM and Karvy Computershare Pvt Ltd. is the registrar to the issue.

As far as BRLM is concerned, out of 10 IPOs brought by this merchant banker, six gave negative returns on the debut day.

 

For the past three years, the company has posted an average EPS of Rs. 11.92. For fiscal 10-11, it earned a net profit of Rs.17.90 crore on a turnover of Rs. 423.97 crore, translating into an EPS of Rs. 16.78.


Conclusion / Investment Strategy

On fully diluted equity post this IPO, the EPS stands at Rs.10.22 and on this basis, the issue is priced at a P/E of 18.6 to 20.5 based on lower and upper price band. Considering NAV of Rs. 40.92 as on 31.3.2011, the asking price is at an average of 4.9 P/BV. The issue looks aggressively priced and hence worth giving a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Sep 5, 2011

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

PG Electroplast IPO FAQs

  1. 1. Why PG Electroplast IPO?

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

  2. 2. How is PG Electroplast IPO?

    Read the PG Electroplast IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. PG Electroplast IPO what should investors do?

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

  4. 4. Is PG Electroplast IPO good?

    Our recommendation for PG Electroplast IPO is to avoid.

  5. 5. Is PG Electroplast IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the PG Electroplast IPO.

  6. 6. When will PG Electroplast IPO allotment status?

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

  7. 7. When will PG Electroplast IPO list?

    The PG Electroplast IPO will list on Monday, September 26, 2011, at BSE, NSE.
More PG Electroplast IPO Views / Analysis / Recommendations ...








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