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Poojawestern BSE SME IPO review (Avoid)

Review By Dilip Davda on Sep 19, 2017

Poojawestern Metaliks Ltd. (PML) is engaged in manufacturing of Brass and Brass Equipments to cater to the international markets. It has been exporting its products to Arab and Gulf countries since last 14 years. PML’s product basket includes brass billets, ingots, brass bars, brass and chrome plumbing fittings, brass inserts and adapters for CPVC and PPR pipes etc. All these products are sold in the name of “P-“brand.

To part finance its working capital and general corpus fund needs, PML is coming out with a maiden IPO of 1521000 equity share of Rs. 10 each at a fixed price of Rs. 36 per share to mobilize Rs. 5.48 crore.. Issue opens for subscription on 22.09.17 and will close on 26.09.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 29.99% of fully diluted post issue paid up equity capital of the company. Its entire equity is issued at par and also included bonus shares issued in the ratio of 254 for every 1 share in January 2017. Post issue its current paid up equity capital of Rs. 3.55 crore will stand enhanced to Rs. 5.07 crore. Cost of acquisition by promoters is just below Rs. 4.70 per share.

On performance front, PML has posted turnover/net profits of Rs. 4.49 cr. / Rs. – (0.01) cr. (FY14), Rs. 15.18 cr. / Rs. 0.10 cr. (FY15) and Rs. 14.92 cr. / Rs. 0.12 cr. (FY16). Thus it has shown inconsistency in top line. Due to restricting of the company it has shown two separate set of performance from 01.04.16 to 08.11.16 and from 09.11.16 to 31.03.17. For these sets it has posted turnover/net profits of RS. 4.66 crore / Rs. 2.71 crore and net profits of Rs. 0.10 cr. and Rs. 0.12 cr. respectively. For the current fiscal, for the period ended on 01.05.17 it has reported turnover of Rs.0.96 cr. with a loss of Rs. – (0.03) cr. Last three fiscal’s average EPS is Rs.0.65 and as on 01.05.17 EPS is negative – (Rs. 0.07). Average RoNW for last three years is 0.73%. Issue is priced at a P/BV of 3.50. Thus issue is highly priced.

On merchant banker’s front, this is the 48th mandate from Pantomath in last three years. Out of last 10 recent listings, 1 opened at discount, 1 at par and the rest with 1 to 18% premium on IPO price.

Conclusion: Considering poor working track record and high pricing of the issue, there is no harm in giving it a miss.


Conclusion / Investment Strategy

Considering poor working track record and high pricing of the issue, there is no harm in giving it a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Sep 19, 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

Poojawestern Metaliks IPO FAQs

  1. 1. Why Poojawestern Metaliks IPO?

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

  2. 2. How is Poojawestern Metaliks IPO?

    Read the Poojawestern Metaliks IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Poojawestern Metaliks IPO what should investors do?

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

  4. 4. Is Poojawestern Metaliks IPO good?

    Our recommendation for Poojawestern Metaliks IPO is to avoid.

  5. 5. Is Poojawestern Metaliks IPO worth Investing?

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

  6. 6. When will Poojawestern Metaliks IPO allotment status?

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

  7. 7. When will Poojawestern Metaliks IPO list?

    The Poojawestern Metaliks IPO list date is not yet available. The Poojawestern Metaliks IPO is planned to list on [.], at BSE SME.