Chittorgarh.com Logo
Loading...

Sanginita Chemicals NSE SME IPO review (Apply)

Review By Dilip Davda on Feb 28, 2017

Sanginita Chemicals Ltd. (SCL) has initially started production of Cuprous Chloride and Cupric Chloride at its factory situated at 3536/8, Near. GIDC, Chhatral, Dist- Gandhinagar (Unit I). Due to increase in the demand of products it has started Unit II to enhance production capacity by installing additional machinery. However, it sold its Unit I and expanded Unit II to the revised higher capacities for producing the cuprous chloride from 1,00,000 Kgs/month to 5,00,000 kgs/month and additional consent for production of Ferric choloride (5,00,000 KGS/month), Zinc Sulphate (10,00,000 KGS/month) and Manganese Sulphate (5,00,000 KGS/month).

At present, SCL manufactures three major products viz. Cuprous Chloride, Copper Sulphate and Cupric Chloride having installed capacity of 60,00,000 Kgs/p.a., 54,00,000 Kgs./p.a and 3,50,000 Kgs./P.a respectively which is used in dyes and pigment industries, paint industries, pharmaceuticals industries, electroplating industries, metal extraction industries and ink, Carbon paper, PVC pipe coating industries etc.

To part finance its working capital needs and general corpus funding requirement, the company is coming out with a maiden IPO of 4566000 equity share of Rs. 10 each at a fixed price of Rs. 22 per share to mobilize Rs. 10.05 crore. Issue opens for subscription on 01.03.17 and will close on 03.03.17. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge platform. Issue is solely lead managed by Swastika Investmart Ltd and Purva Sharegistry India Pvt Ltd is the registrar to the issue. While it issued major equity at par during 2005 to 2016, it also issued few shares at a price of Rs. 250 per share in March 2010, June 2010 and July 2011. It has also issued bonus shares in the ratio of 1 share for every 2 shares held in December 2016. Post issue, its current paid up equity capital of Rs. 12.70 crore will stand enhanced to Rs. 17.37 crore.

On performance front, after suffering a setback in the fiscal 2012-13, the company has posted turnover/net profits of Rs. 119.03 cr. / Rs. 0.84 cr. (FT14), Rs. 128.93 cr. / Rs. 1.00 cr. (FY15) and Rs. 144.36 cr. / Rs. 1.10 cr. (FY16). For six months ended 30.09.16 of the current fiscal it has posted net profit of Rs. 0.71 crore on a turnover of Rs. 70.79 crore. If we annualize this and attribute to the fully diluted equity post issue then asking price is at a P/E of around 26 plus against peers trading above 60 P/E based on last traded price on the basis of December 2016 ending results.

On merchant banker’s front, this is the second mandate from its stable and the earlier issue gave positive returns on listing date.

Conclusion: Issue appears to have been priced reasonably. Investors having surplus funds may consider investment for long term.


Conclusion / Investment Strategy

Issue appears to have been priced reasonably. Investors having surplus funds may consider investment for long term.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Feb 28, 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

Sanginita Chemicals IPO FAQs

  1. 1. Why Sanginita Chemicals IPO?

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

  2. 2. How is Sanginita Chemicals IPO?

    Read the Sanginita Chemicals IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Sanginita Chemicals IPO what should investors do?

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

  4. 4. Is Sanginita Chemicals IPO good?

    Our recommendation for Sanginita Chemicals IPO is to subscribe.

  5. 5. Is Sanginita Chemicals IPO worth Investing?

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

  6. 6. When will Sanginita Chemicals IPO allotment status?

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

  7. 7. When will Sanginita Chemicals IPO list?

    The Sanginita Chemicals IPO will list on Friday, March 10, 2017, at NSE SME.