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SI VI Shipping Corporation Ltd IPO Review (Avoid)

Review By Dilip Davda on Feb 15, 2014

While we have three Tax Free Bonds offer, yet another BSE SME IPO is entering in the capital market. Details of the same are as under:

 

SI. VI. SHIPPING CORPORATION LIMITED: (SVSC)The Company is a new entrant to the Indian shipbuilding sector and proposes to develop a modern shipyard spread over 24 acres to build ships of up to 120 meter length at the Dahej Shipbuilding Park developed by Gujarat Maritime Board supported by Government of Gujarat, India. Its focus would be to bid for ships up to 120 meter length in cargo, offshore, and other specialized segments. Currently it is working as a subcontractor for fabrication of hull with L&T’s shipyard at Hazira. Immediately on incorporation, SVSC bagged order of fabrication and erection of aluminum hull for 7 high speed Interceptor boats from L&T’s Hazira Shipyard. The company has already executed the first boat in a record time. It has enabled it to develop a team and capability through which it can undertake new shipbuilding activities. A highly professional and motivated team of professionals in the relevant field manages the affairs of Company.

 

Today, almost 60% of the total fabrication work allotted by L&T’s Hazira Shipyard is done by the company and in a short span it also took over operation of modern CNC machine for preparation of fabrication material for L&T’s Hazira Shipyard. Recently the company is also been awarded piping work for high speed interceptor boats by L&T’s Hazira Shipyard.

 

The company is issuing 2742000 equity share of Rs. 10 each at a fixed price of Rs. 25 per share to mobilize Rs. 6.86 crore to meet repayment of debt and general corpus funds for capex. The issue is opening for subscription on 18.02.14 and will close on 21.02.14. Minimum application is to be made for 6000 shares and in multiples thereof, thereafter. Post this issue current equity of Rs. 3.01 crore will rise to Rs. 5.75 crore. Issue is lead managed by Pantomath Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd is the registrar to the offer.

 

On performance front, the company has posted an average EPS of Rs. 5.43 for last two fiscal and for first six months ended 30.09.13 it has earned net profit of Rs. 0.07 crore on a turnover of Rs. 1.10 crore translating into EPS of Rs. 0.47 on annualized basis. If we attribute these earnings, then asking price is at a P/E of 53+ and at a P/BV of 2.4 making it a costly offer.

 

This being the first mandate for lead manager, no track records are available.


Conclusion / Investment Strategy

Avoid this costly offer having entry barrier as well.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Feb 15, 2014

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

SI VI Shipping IPO FAQs

  1. 1. Why SI VI Shipping IPO?

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

  2. 2. How is SI VI Shipping IPO?

    Read the SI VI Shipping IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. SI VI Shipping IPO what should investors do?

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

  4. 4. Is SI VI Shipping IPO good?

    Our recommendation for SI VI Shipping IPO is to avoid.

  5. 5. Is SI VI Shipping IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the SI VI Shipping IPO.

  6. 6. When will SI VI Shipping IPO allotment status?

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

  7. 7. When will SI VI Shipping IPO list?

    The SI VI Shipping IPO will list on Thursday, March 6, 2014, at BSE SME.