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Review By Dilip Davda on September 25, 2017
Shree Ganesh Remedies Ltd. (SGR) is engaged in manufacturing and dispatch of drug intermediates and chemicals like amine hydrochloride and specialty fine chemicals for pharmaceutical industry. SGR manufactures products relating to antipsychotic, antiseptic, deprotonation reactions, hyperlipidemia, Alzheimer and anti-viral.
To part finance setting up of choloro compound derivatives manufacturing plant, general corpus fund needs, the company is coming out with a maiden IPO of 2376000 equity share of Rs. 10 each at a fixed price of Rs.36 per share to mobilize Rs.8.55 crore. Issue opens for subscription on 28.09.17 and will close on 05.10.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Fedex Securities Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.48% of the post issue paid up capital of the company. From incorporation till May 2008 it raised equity at par, thereafter; it raised further equity in the price range of Rs. 22.81 to Rs. 70 per share and has also issued bonus shares in the ratio of 5 for 1 in August 2017. Post issue its current paid up equity capital of Rs. 6.60 crore will stand enhanced to Rs. 8.97 crore.
On performance front, SGR has reported turnover/net profits of Rs. 19.13 cr. / Rs. 3.21 cr. (FY14), Rs. 16.99 cr. / Rs. 1.27 cr. (FY15), Rs. 15.88 cr. / Rs. 1.08 cr. (FY16) and Rs. 20.32 cr. / Rs. 2.61 cr. (FY17). Thus it has shown inconsistency in top and bottom lines for last four fiscals. It has posted an average EPS of Rs. 2.85 and average RoNW of 12.14% on an equity capital of Rs. 1.10 crore. Issue is priced at a P/BV of 2.81. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 12 plus against peers trading in the range of 23 to 49 P/E. Thus issue is priced justifiably, but inconsistency in performance raises concern.
This the first mandate from Fedex Securities Ltd and it has no track record.
Conclusion: Inconsistency in performance is a major concern. However, cash surplus investors may consider investment for long term. (Subscribe)
Review By Dilip Davda on September 25, 2017
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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. 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 their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About 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.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of Shree Ganesh Remedies Ltd offers an early investment opportunity in Shree Ganesh Remedies Ltd. A stock market investor can buy Shree Ganesh Remedies IPO shares by applying in IPO before Shree Ganesh Remedies Ltd shares get listed at the stock exchanges. An investor could invest in Shree Ganesh Remedies IPO for short term listing gain or a long term.
Read the Shree Ganesh Remedies IPO recommendations by the leading analyst and leading stock brokers.
Shree Ganesh Remedies IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Shree Ganesh Remedies IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Shree Ganesh Remedies IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Shree Ganesh Remedies IPO.
The Shree Ganesh Remedies IPO allotment status will be available on or around October 10, 2017. The allotted shares will be credited in demat account by October 12, 2017. Visit Shree Ganesh Remedies IPO allotment status to check.
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RHP
What is the horizon of long term in years in this perspective.?
2-3?
4-5?
more than 5?
Please advise