Priti International NSE SME IPO review (Others)

Review By Dilip Davda on Jun 4, 2018

Priti International Ltd. (PIL) is primarily engaged in manufacturing and exporting of Handicraft Products. It also deal in manufacturing of wooden, metal and textile based furniture and handicrafts products, upcycling and recycling of various kinds of raw, unusable and waste metal and wooden articles. PIL’s products range from solid wooden and metal furniture articles, home furnishing items, creative wooden and metal articles for various uses, textile based products like cushions, pillow covers, rugs and carpets, handbags, travel bags and backpacks, pet products, etc. The company that was in origin a proprietary concern of the promoters was merged with PIL in November 2017 as going concern. PIL was incorporated on 30.06.2017.

To part finance purchase of plant and machinery with related civil works, working capital and general corpus fund needs, PIL is coming out with a maiden IPO of 700800 equity shares of Rs. 10 each at a fixed price of Rs. 75 per share to mobilize Rs. 5.26 cr. Issue opens for subscription on 11.06.18 and will close on 13.06.18. Minimum application is to be made for 1600 shares and in multiples thereon, thereafter. Post allotment shares will be listed on NSE SME Emerge. Issue constitutes 27.01% of the post issue equity capital of the company. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Having raised initial equity at par, it converted loans into equity at a rate of Rs. 75 per share in December 2017.  Average cost of acquisition of shares by the promoters is Rs. 10.00, Rs. 63.58, Rs. 74.95 and Rs. 74.95 per share. Post issue, company’s current paid up equity capital of Rs.1.89 crore will stand enhanced to Rs. 2.59 crore.

On performance front, as a proprietary concern, it posted turnover/net profits of Rs. 20.04 cr. / Rs. 0.76 cr. (FY14), Rs. 20.55 cr. / Rs. 3.39 cr. (FY15), Rs. 21.98 cr. / Rs. 0.94 cr. (FY16) and Rs. 20.33 cr. / Rs. 1.11 cr. (FY17). Thus while top line remained static for all these years, it has seen heavy ups and downs for bottom lines raising concern of sustainability going forward. For the period ended 10.11.17 it has earned net profit of Rs. 0.64 cr. on a turnover of Rs. 10.94 cr. Post conversion into a public limited company, for the period ended on 31.12.17 it has posted net profit of Rs. 0.16 cr. on a turnover of Rs. 3.24 cr. If we combine workings of period ended 10.11.17 and 31.12.17, then it has earned net profit of Rs. 0.80 cr. on a turnover of Rs. 14.18 cr. If we annualize this merged performance and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 18 plus. It has no listed peers to compare with. Issue is priced at a P/BV of 3.55 on the basis of its NAV of Rs. 21.13 as on 31.12.17 and at a P/BV of 2.10 on the basis of post issue NAV of Rs.35.68. Thus issue appears fully priced.

On merchant banker’s front, this is 72nd mandate from its stable in last four fiscals. Out of last 10 listings, 1 opened at par and 9 with a premium ranging from 1.59% to 20% on the day of listing.


Conclusion / Investment Strategy

Considering fully priced issue from new sector company having inconsistency in bottom line, cash surplus investors may consider investment at their own risk.

Review By Dilip Davda on Jun 4, 2018

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

Priti International IPO FAQs

  1. 1. Why Priti International IPO?

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

  2. 2. How is Priti International IPO?

    Read the Priti International IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Priti International IPO what should investors do?

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

  4. 4. Is Priti International IPO good?

    Sorry, we didn't rate the Priti International IPO.

  5. 5. Is Priti International IPO worth Investing?

    Our lead analyst Mr. Dilip Davda didn't rate the Priti International IPO.

  6. 6. When will Priti International IPO allotment status?

    The Priti International IPO allotment status will be available on or around Jun 18, 2018. The allotted shares will be credited in demat account by Jun 20, 2018. Visit Priti International IPO allotment status to check.

  7. 7. When will Priti International IPO list?

    The Priti International IPO will list on Thursday, June 21, 2018, at NSE SME.

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