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Rudrabhishek Enterprise NSE SME IPO review (May apply)

Review By Dilip Davda on Jun 19, 2018

Rudrabhishek Enterprise Ltd. (REL) that started as a service provider expanded its service portfolio to Infrastructural services, Urban Designing and Planning, Global Information system, Building Designing service and Project Management service.  REL is an ISO 9001:2008 Certified Company which follows good management practices. Considering its servicing portfolio, REL is a “One Stop Solution” for its clients. Some major corporate clients of the Company include Ansal API, Emaar MGF Land Limited, Gannon Dunkerley & Co. Limited, Hyundai Motor India Private Limited, Omaxe Limited, Paarth Infrabuild Private Limited etc. Apart from the corporate clients mentioned above, the Company has been empanelled with 30+ Government Development Authority Departments for its services.

With the team of highly experienced personnel, REL provides various infrastructure consultancy services such as Urban Infrastructure Plan, Smart City Projects, Pradhan Mantri Awas Yojna, Street Vendor Mapping Plan, City Water Supply schemes; Solid waste management system; Electrical Distribution System, Storm Water Drainage system including rain water harvesting system and preparation of detailed drawings and plan for execution of same.

To part finance its working capital and general corporate fund needs, REL is coming out with a maiden IPO of 4569000 equity shares of Rs. 10 each with a fixed price of Rs.41 per share to mobilize Rs.18.73 cr. Issue opens for subscription on 29.06.18 and will close on 05.07.18. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is jointly lead managed by Khambatta Securities Ltd. and Corporate Capital Ventures Pvt. Ltd. Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.35% of the post issue paid up capital of the company. Having issued initial equity at par, it raised further equity at a price of Rs. 50 per share in January 2018. It has also issued bonus shares in the ratio of 20 for 1 in September 2017. Average cost of acquisition of shares by the promoters is Rs. 0.48 and Rs. 5.54 per share. Post issue, REL’s current paid up capital of Rs. 12.77 cr. will stand increased to Rs. 17.34 cr. It has paid a dividend of 100% for last five years in a row. 

On performance front, for last four fiscals, REL has (on a consolidated basis) posted turnover/net profits of Rs. 33.41 cr. / Rs. 5.36 cr. (FY14), Rs. 38.66 cr. / Rs. 5.68 cr. (FY15), Rs. 39.35 cr. / Rs. 6.84 cr. (FY16) and Rs. 34.23 cr. / Rs. 3.76 cr. (FY17). For first nine months ended on 31.1217 of FY18, it has earned net profit of Rs. 1.99 cr. on a turnover of Rs. 35.31 cr.  After good bottom lines for FY 14 to FY 16, it suffered a setback for FY17 onwards. Currently it has an order book worth Rs. 130+ crore. For last three fiscals it has posted an average EPS of Rs. 4.84 and an average RoNW of 18.12%. Issue is priced at a P/BV of 1.29 on the basis of its NAV of Rs. 31.68 as on 31.12.17 and at a P/BV of 1.20 on the basis of post issue NAV of Rs. 34.09. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 27 against industry average P/E of 41. As per offer documents it has shown Dhruv Consultancy, S S Infra, Mitcon Consultancy and Artefact as its listed peers who are currently trading at a P/E of around 22, 9, 402 and 0 (as on 19.06.18). As on 31.12.17, its debt were 0.12% of shareholder’s fund.

On merchant banker’s front, this is the first mandate from Khambatta Securities and thus has no track record. From Corporate Capital this is the sixth mandate in last three fiscals. Out of last 5 listings, 1 opened at discount to offer price, and the rest opened with a premium ranging from 0.70% to 8.75% on the day of listing.


Conclusion / Investment Strategy

Issue is fully priced on the basis of its current performance. However, considering the order book, investors may consider moderate investment for long term. (Subscribe for long term).

Review By Dilip Davda on Jun 19, 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

Rudrabhishek Enterprises IPO FAQs

  1. 1. Why Rudrabhishek Enterprises IPO?

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

  2. 2. How is Rudrabhishek Enterprises IPO?

    Read the Rudrabhishek Enterprises IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Rudrabhishek Enterprises IPO what should investors do?

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

  4. 4. Is Rudrabhishek Enterprises IPO good?

    Our recommendation for Rudrabhishek Enterprises IPO is to subscribe for long term.

  5. 5. Is Rudrabhishek Enterprises IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Rudrabhishek Enterprises IPO.

  6. 6. When will Rudrabhishek Enterprises IPO allotment status?

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

  7. 7. When will Rudrabhishek Enterprises IPO list?

    The Rudrabhishek Enterprises IPO will list on Friday, July 13, 2018, at NSE SME.