Shanti Overseas NSE SME IPO review (Subscribe)

Review By Dilip Davda on Jul 18, 2017

Shanti Overseas (India) Ltd (SOIL) is engaged in manufacturing of soya products which includes, soya de-oiled cakes (soya meal), soya crude oil, degummed oil and soya lecithin, and are also into primary processing and trading of agri commodities such as chickpeas, soyabeans, cracked corn, maize, yellow peas, pulses etc. Present two units of manufacturing are taken on rent by the company. SOIL is in process of setting up a processing plant in the area of Dhannad, dist. Indore, for production of edible partially defatted organic Soya Flour, textured Soy Protein, expeller pressed physical refined oil and Organic Soya Lecithin. Post completion of this unit, second unit facilities will be transferred here.

Company has been accorded with the status of "One Star Export House" by Ministry of Commerce & Industry, Government of India and has also received ISO 22000:2005 and FSSAI License for processing activities carried at Unit II. It is also certified from Kosher and is registered with U.S. Food and Drug Administration (USFDA). SOIL has recently incorporated two wholly owned subsidiaries, namely, Biograin Protinex Private Limited and Shaan Agro Oils & Extractions Private Limited.

To part finance purchase of machinery for the proposed plant at Dhannad, investment in subsidiary and general corpus fund needs, the company is coming out with a maiden IPO of 2004000 equity share of Rs. 10 each at a fixed price of Rs. 50 per share to mobilize Rs. 10.02 crore. Issue opens for subscription on 21.07.17 and will close on 26.07.17. 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 solely lead managed by Hem Securities Ltd and Link Intime India Pvt Ltd is the registrar to the issue. SOIL issues equity on incorporation at a consideration of Rs. 20 per share and then issued further equity at Rs. 25 per share. It has also issued bonus shares in the ratio of 5 for 1 in March 2017 and in the ratio of 1 for 2 in May 2017. Thus sudden two bonus issues in a short span of 2 months in 2017 is surprising. Post issue, company's current paid up equity capital of Rs. 5.40 crore will stand enhanced to Rs. 7.40 crore. The issue constitutes 27.07% of the post issue paid up capital of the company.


On performance front, the company has (on standalone basis) reported turnover/net profits of Rs. 89.28 cr. / Rs. 0.33 cr. (FY13), Rs. 104.92 cr. / Rs. 0.48 cr. (FY14), Rs. 71.52 cr. / Rs. 0.70 cr. (FY15), Rs. 91.04 cr. / Rs. 1.87 cr. (FY16) and Rs. 115.88 cr. / Rs. 3.79 cr. (FY17). As per prospectus, its FY17 restated performance on consolidated basis remains same as standalone. Despite declined top line for FY15 and FY16, it reported higher net. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 9.7 (against industry average of 39 plus) and at a P/BV of 3.14. Company's average RoNW for last three fiscal is 39.17%.

On merchant banker's front, this is the 36th mandate from its stable so far and out of last 10 listings, one IPO gave negative return, two IPOs opens just above offer price and the rest opened at a good premium to offer price.

Conclusion: Investors may consider investment for short to long term.


Conclusion / Investment Strategy

Investors may consider investment for short to long term in Shanti Overseas NSE SME IPO.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Jul 18, 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

Shanti Overseas IPO FAQs

  1. 1. Why Shanti Overseas IPO?

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

  2. 2. How is Shanti Overseas IPO?

    Read the Shanti Overseas IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Shanti Overseas IPO what should investors do?

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

  4. 4. Is Shanti Overseas IPO good?

    Our recommendation for Shanti Overseas IPO is to subscribe.

  5. 5. Is Shanti Overseas IPO worth Investing?

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

  6. 6. When will Shanti Overseas IPO allotment status?

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

  7. 7. When will Shanti Overseas IPO list?

    The Shanti Overseas IPO will list on Thursday, August 3, 2017, at NSE SME.

3 Comments

TOPS
3. TOPS  Aug 26, 2017 19:04
DILIP SIR

WHAT IS WRONG WITH STOCK , FALLING CONTINUOUS SINCE LISTING , CRAETING NEW 52 WEEK LOW EVERY DAY ,
ANYTHING WRONG WITH COMPANY MANAGEMENT ????
TOPS
3.1. TOPS  Sep 2, 2017 19:16
Dilip sir

If you have any latest information on share
Please share with investor

I DOUBT MANAGEMENT IT SEEMS THAT THEY THEMSELF. WITH RTA ARE MANIPULATING PRICE

HOW ONE CAN RELY ON SUCH MANAGEMENT
I REQUEST U TO KEEP THEM ON BLACK LIST
FOR ANY FUTURE IPO OF ANY OF THESE DIRECTOR FOR NEGATIVE RATING
AS YOU ARE REPRESENTING POOR INVESTOR
THEY SHOULD BE TOUGHT LESSON. PLAYING WITH INVESTOR HARD EARN MONEY

ANY INFORMATION ON QE 30/06/2017 RESULT ?
TOPS
3.2. TOPS  Sep 12, 2017 07:30
Poor management
Poor performance of share after listing
Dont finance such companies
Never subscribe to such company
Mkt price of share is below issue price since listing
Promoters are interested in keeping share price lower instead of creating value
JKG
2. JKG  Aug 9, 2017 21:12
Sir should we average stock ? or something wrong with management
Jigarjigar
1. Jigarjigar  Aug 8, 2017 18:18
Dilip sir,
After Jalan again your opinion goes
drastically wrong in shanti.
On which basis you advised to
Subscribe in Shanti & Jalan.








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