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Silverpoint Infratech Ltd IPO Review (Avoid)

Review By Dilip Davda on Aug 8, 2013

While secondary market is witnessing blood bath and primary market in is limbo, we have yet surprise in the form of offer for sale for BSE SME listing from Silverpoint Infratech. Details of the issue are as under:

Silverpoint Infratech (SIL) is engaged in the business of land development, construction services, road construction, civil & structural construction services and infrastructure sector projects. The company's client list includes NKC Projects, Jain Infraprojects, VKS Projects Shri Mahavir Ferro Alloys, Binani Cement, PACL India, Prakash Constrowell etc.

To list its share on BSE SME the company is coming out with an offer for sale of 8000000 equity share of Rs. 10 each at a fixed price of Rs. 15 per share. Proceeds from this issue of Rs. 12 crore will go to existing stakeholders being 100% offer for sale and thus company is not raising any fresh equity. Issue opens for subscription on 12.08.13 and will close on 14.08.13. Minimum application is to be made for 8000 shares and in multiples thereof, thereafter. The issue is solely lead managed by Inventure Merchant Banker Services Pvt. Ltd. and Bigshare Services Pvt. Ltd is the registrar to the issue.

The company has posted an average EPS of Rs. 0.17 for last three fiscals. For the 11months ended on 38.02.13, it has earned net profit of Rs. 0.49 crore on a turnover of Rs. 230.75 crore translating in to an EPS of Rs. 0.27. Thus the asking price at Rs. 15 is at 55+ P/E. Between March 2005 to March 2009 company issued 1968913 equity shares at a price of Rs. 200 on preferential basis and in July 2012 issues bonus in the ratio of 9 shares for every 1 share held. Listed fancy peers like Era Infra, Jaypee Infra etc are trading at a trailing 12 months  P/E of around 7 to 16.


Conclusion / Investment Strategy

As for the merchant banker’s performance, this is the fourth SME issue from their stable and considering their market game in its own parent company and the other mandates listing, one may get some rewards. But current status are not having encouraging trends and hence, investors should AVOID this offer.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Aug 8, 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

Silverpoint Infratech IPO FAQs

  1. 1. Why Silverpoint Infratech IPO?

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

  2. 2. How is Silverpoint Infratech IPO?

    Read the Silverpoint Infratech IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Silverpoint Infratech IPO what should investors do?

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

  4. 4. Is Silverpoint Infratech IPO good?

    Our recommendation for Silverpoint Infratech IPO is to avoid.

  5. 5. Is Silverpoint Infratech IPO worth Investing?

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

  6. 6. When will Silverpoint Infratech IPO allotment status?

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

  7. 7. When will Silverpoint Infratech IPO list?

    The Silverpoint Infratech IPO will list on Wednesday, August 28, 2013, at BSE SME.