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Polymac Thermoformers Ltd IPO Review (Avoid)

Review By Dilip Davda on Feb 1, 2014

 

While we have reports for FPO from Engineering India round the corner, being the first main line issue for CY 2014, yet another BSE SME issue is entering the capital market this week. Details of the same are as under:

 

 

Polymac Thermoformers Ltd. (PTL) is engaged in to manufacturing operations of disposable plastic glasses, cups, and bowls etc. These are fast replacing conventional glasses, cups etc. and are manufactured by thermoforming technique.

 

 

To meet Rs. 7.70 crore fund requirements for capital expenditure on existing manufacturing plant, brand building and raising general corpus fund, the company is offering 2200000 equity share of Rs. 10 each at a fixed price of Rs. 35 per share. Minimum application is to be made for 4000 shares and in multiples thereof, thereafter. The issue opens for subscription on 06.02.14 and will close on 10.02.14. Post issue shares will be listed on BSE SME. Guiness Corporate Advisors Pvt. Ltd is the lead manager and Link Intime India Pvt. Ltd. is the registrar to the issue.

 

 

On performance front, the company has posed an average EPS of Rs. 0.02 for last three fiscals. For eight months ended on 30.11.13 it has posted net profit of Rs. 0.35 crore on a turnover of Rs.0.68 crore and marked an EPS of Rs. 1.48 that is really surprising compared to net profit of Rs. 0.01 crore on a turnover of Rs. 1.57 crore for fiscal 2012-13. If one attribute this earnings on annual basis on fully diluted equity post this issue, then EPS stands at Rs. 1.11. Its NAV stands at Rs. 12.86 as on 30.11.13. Based on this the asking price is at a P/E of 31+ and at a P/BV of 2.7 which is exorbitant.

 

 

During 31.03.2008 t 31.03.2010 the company made preferential issues at a price of Rs. 100 and Rs. 500 and then converted preference shares into equity at par on 12.07.2013. It also issued bonus shares in the ratio of 4 for 1 on 08.08.2013. Its present equity of Rs. 2.58 crore will rise to Rs. 4.78 crore post this issue.

 

 

On merchant banker’s front, this is 11th SME mandate from it and has mixed track record.


Conclusion / Investment Strategy

 

Avoid this costly offer

 

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Feb 1, 2014

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

Polymac Thermoformers IPO FAQs

  1. 1. Why Polymac Thermoformers IPO?

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

  2. 2. How is Polymac Thermoformers IPO?

    Read the Polymac Thermoformers IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Polymac Thermoformers IPO what should investors do?

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

  4. 4. Is Polymac Thermoformers IPO good?

    Our recommendation for Polymac Thermoformers IPO is to avoid.

  5. 5. Is Polymac Thermoformers IPO worth Investing?

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

  6. 6. When will Polymac Thermoformers IPO allotment status?

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

  7. 7. When will Polymac Thermoformers IPO list?

    The Polymac Thermoformers IPO will list on Wednesday, February 26, 2014, at BSE SME.