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Samruddhi Realty Ltd IPO Review (Avoid)

Review By Dilip Davda on Mar 29, 2013

In a surprised announcement, we have yet another BSE SME IPO opening on 28.03.13, i.e. Samruddhi Realty Ltd. (SRL) taking total tally to 24 SME IPOs for BSE SME Listing. Details of the same are as under:

After doing small jobs in the initial years of its operations for execution of luxury apartments in small size segment and completing them with assured quality standards and timely delivery. Till 2009 it completed 125000 sq. ft of constrictions and currently has ongoing contracts for a Developable & Saleable Area of approx. 4,46,117 Sq.Feet and 2 upcoming Projects with a Developable & Saleable Area of approx. 4,75,000 Sq. Feet. For this projects, the company raised loans from various sources. Now to repay some of these loans and listing purpose, it is coming out with an IPO for 2170000 equity share of Rs. 10 each at a fixed price of Rs. 12 per share to mobilize Rs. 2.60 crore. The issue is opening for subscription on 28.03.13 and will close on 03.04.13. Minimum application is to be made for 10000 shares and in multiples thereof, thereafter. Post issue, the shares will be listed on BSE SME. Hem Securities Ltd. is the sole manager for this issue and Sharex Dynamic India (P) Ltd is the registrar to the issue.

On performance front for the company, its top line witnessed diminishing patter from Rs. 9.04 crore in 2008 to Rs. 3.46 crore in 2009 and Rs. 2.89 crore in 2010. It surged to Rs. 5.65 crore in 2011 and further up to Rs. 12.56 crore in 2012 and for first six months its top line is at Rs. 9.87 crore. However, its profit remained inconsistent at Rs. 0.21 crore (2008), Loss of Rs. 0.41 crore (2009), Rs. 0.45 crore (2010), Rs. 0.29 crore (2011) and Rs. 0.40 crore (2012) and for first half of current fiscal at Rs. 0.59 crore. For last three fiscal, average EPS is Rs. 3.25. (On consolidated basis). Entire existing equity is raised at a price of Rs. 10 per share at various stages. Post IPO its equity will rise to Rs. 7 crore and if we attribute first half earnings on annualized basis, then the offer is at a P/E of 7 plus.

On Merchant Banker's front, they had 2 mandates in the pat out of which only 1 has given listing gains.

 


Conclusion / Investment Strategy

Considering the current down-turn in realty sector and the entry barrier, better to skip this IPO.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Mar 29, 2013

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

Samruddhi Realty IPO FAQs

  1. 1. Why Samruddhi Realty IPO?

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

  2. 2. How is Samruddhi Realty IPO?

    Read the Samruddhi Realty IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Samruddhi Realty IPO what should investors do?

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

  4. 4. Is Samruddhi Realty IPO good?

    Our recommendation for Samruddhi Realty IPO is to avoid.

  5. 5. Is Samruddhi Realty IPO worth Investing?

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

  6. 6. When will Samruddhi Realty IPO allotment status?

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

  7. 7. When will Samruddhi Realty IPO list?

    The Samruddhi Realty IPO will list on Friday, April 12, 2013, at BSE SME.