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Silly Monks Entertainment NSE SME IPO review (May apply)

Review By Dilip Davda on Jan 1, 2018

Silly Monks Entertainment Ltd. (SMEL) is a ‘South India’ based entertainment & media startup with a focus of being a recognized & fast growing player in areas such as digital media publishing, movie/content production, celebrities social media management, App development, Audio content Distribution, Google Ad word and online / digital Advertising, event management, and live band performances. Its main focus currently is Digital Media Publishing. Company publishes content on various platforms such as YouTube, Facebook, Amazon, Vuclip etc. The contents that are being published over these platforms are either created by it i.e. by in-house production or acquired through outright purchase or through syndicated method. In case of content which is bought by it, it owns the copy rights of the content through an agreement with assignor and hence the publishing revenue is fully accrued to it. When the content is through syndication, SMEL share the revenue with the content partner. It has been growing focus in movie production; wherein it has co-produced Telugu Movies named Oohalu Gusagusalade’ ‘Dikkulu Choodaku Ramayya’, & Tungabhadra with Vaaraahi Chalana Chitram. It is also planning to venture into the Hindi Film industry through its co produced venture ‘The Great Indian Escape’ with KIK Butt Entertainment.

To part finance its plans of setting up new offices in Mumbai, Chennai, Bengaluru, Delhi, Cochin and Hyderabad, working capital and expanding new content portfolios, SMEL is coming out with a maiden IPO of 1260000 equity shares of Rs. 10 each at a fixed price of Rs. 120 per share to mobilize Rs. 15.12 crore. Issue opens for subscription on 05.01.18 and will close on 10.01.18. Minimum application is to be made for 1200 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. SMEL is issuing 970000 shares as fresh equity and offer for sale of 290000 equity shares. Issue is solely lead managed by Aryaman Financial Services Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 27.15% of the post issue paid up capital of the company. SMEL issued equity shares at par on incorporation, in November 13 and August 15. It also raised equity at a price of Rs. 75 in July 14 and at a price of Rs. 282 per share between May 2016 and March 2017. It has issued bonus shares in the ratio of 6 shares for every 1 share held in May 2017. Post issue its current paid up equity capital of Rs. 3.67 crore will stand enhanced to Rs. 4.64 crore.

On performance front, SMEL has (on a consolidated basis) posted turnover/net profits of Rs. 3.28 cr. / Rs. –(0.03) cr. (FY 15), Rs. 4.93 cr. / Rs. 0.29 cr. (FY16) and Rs. 12.02 cr. / Rs. 1.45 cr. (FY17). For H1 of the current fiscal it has earned net profit of Rs. 0.96 crore on a turnover of Rs. 6.54 crore. For last three fiscals it has posted an average EPS of Rs. 2.67 and average RoNW of 21.08% on an equity base of Rs. 0.52 crore. Issue is priced at a P/BV of 6.88 on NAV of Rs. 17.45as on 30.09.17 and at a P/BV of 3.24 on the basis of post issue NAV of Rs. 37. If we annualize its latest earnings and attribute it on fully diluted post issue equity, then asking price is at a P/E of around 32 plus. It has no listed peers to compare with. Issue appears fully priced based on the given performance.

On merchant banker’s front, this is the 20th mandate from its stable. Out of last 10 listings, 3 opened at discount, 1 at par and the rest at a premium ranging from 0.2% to 20% on the day of listing.

Conclusion: Considering fully priced offer, cash surplus risk savvy investors may consider moderate investment for long term. (Other).


Conclusion / Investment Strategy

Considering fully priced offer, cash surplus risk savvy investors may consider moderate investment for long term. (Other).

Review By Dilip Davda on Jan 1, 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

Silly Monks IPO FAQs

  1. 1. Why Silly Monks IPO?

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

  2. 2. How is Silly Monks IPO?

    Read the Silly Monks IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Silly Monks IPO what should investors do?

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

  4. 4. Is Silly Monks IPO good?

    Our recommendation for Silly Monks IPO is to subscribe for long term.

  5. 5. Is Silly Monks IPO worth Investing?

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

  6. 6. When will Silly Monks IPO allotment status?

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

  7. 7. When will Silly Monks IPO list?

    The Silly Monks IPO will list on Wednesday, January 17, 2018, at NSE SME.