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Ruby Cables BSE SME IPO review (Apply)

Review By Dilip Davda on Mar 29, 2016

Ruby Cables Ltd. (RCL) is engaged in manufacturing and dealing of qualitative conductors, cables and wires. Currently it has installed capacity of 50000 kms p.a. of conductors and 3200 kms p.a. of cables. Its products are sold under the brand name “Ru Cab”.

To part finance its working capital and other funds requirement, the company is coming out with a maiden IPO of 2001000 equity share of Rs. 10 each at a fixed price of Rs. 50 per share to mobilize Rs. 10.01 crore. Issue opens for subscription on 30.03.16 and will close on 05.04.16. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Issue is solely managed by Pantomath Capital Advisors Pvt Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE SME.

On performance front, it has shown consistent growth in top line from 2011 to 2014, but it declined in 2015. Its turnover grew from Rs. 27.77 crore in FY 11 to Rs. 97.92 crore in FY 14 and declined to Rs. 86.13 for FY15. Its net profits also marked improvement from Rs. 0.44 crore (FY11 ) to Rs. 3.27 crore (FY14), but it incurred losses of Rs. 2.38 crore for FY 15. For six months ended 30.09.15 it has posted net profit of Rs. 0.42 crore on a turnover of Rs. 48.21 crore. It issued equity shares at par from 1996 to 2007. In 2012 it issued further equity at a price of Rs. 30 per share and in November 15 at a price of Rs. 50 per share. Its current paid up equity capital of Rs. 4.25 crore will stand enhanced to Rs. 6.25 crore post IPO. If we annualize these earnings then EPS on fully diluted equity then EPS will stand at Rs. 1.34 that will translate asking price at a P/E of 37 plus. Thus issue appears to be highly priced compared to its some of peers trading at a P/E of 20 or below.

On merchant banker’s front, this is 16th IPO from its stable and earlier 15 mandates have given mixed performances post listing.

Conclusion: Only risk savvy fund surplus investors may consider parking of funds for long term.


Conclusion / Investment Strategy

Only risk savvy fund surplus investors may consider parking of funds for long term.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Mar 29, 2016

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

Ruby Cables IPO FAQs

  1. 1. Why Ruby Cables IPO?

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

  2. 2. How is Ruby Cables IPO?

    Read the Ruby Cables IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Ruby Cables IPO what should investors do?

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

  4. 4. Is Ruby Cables IPO good?

    Our recommendation for Ruby Cables IPO is to subscribe.

  5. 5. Is Ruby Cables IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Ruby Cables IPO.

  6. 6. When will Ruby Cables IPO allotment status?

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

  7. 7. When will Ruby Cables IPO list?

    The Ruby Cables IPO will list on Wednesday, April 13, 2016, at BSE SME.