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SMVD Poly NSE SME IPO review (May apply)

Review By Dilip Davda on Dec 11, 2017

SMVD Poly Pack Ltd. (SMVD) is engaged in the business of manufacturing of PP (Polypropylene)/HDPE (High Density Polyethylene) woven sacks bags & Sacks, Leno Bags, Jumbo (Flexible Intermediate Bulk Container) FIBC Bags & HDPE Tarpaulin. The Company started its Operations with initial capacity of 1200 MT per annum and at present has the installed capacity of 4420 MT per annum. The manufacturing facility of the Company is situated at the prime location in Parganas District of West Bengal close to and well connected with Kolkata Port and Airport, Haldia Port. With its policy and commitment to produce the best quality products, SMVD has been able to establish itself as one of the leading manufacturer of PP/HDPE Woven Sack Bags, FIBC and HDPE Tarpaulin. At present it serves both B2B and B2C sectors. It’s customers segment include fertilizer plants, Food Corporation of India, Mining & chemical industries, flour mills, ceramic industries, Steel Industries, Plastic compounds, Rice Plants, Poultry Farms etc.

To part finance its business expansion plans, working capital and general corpus fund needs, SMVD is coming out with a maiden IPO of 1640000 equity shares of Rs. 10 each at a fixed price of Rs. 55 per share to mobilize Rs. 9.02 crore. Issue opens for subscription on 13.12.17 and will close on 15.12.17. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Post allotment shares will be listed on NSE SME Emerge. Issue is solely lead managed by Corporate Capitalventures Pvt. Ltd. and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 33.03% of the post issue paid up capital of the company. The average cost of acquisition of the shares by the promoters ranging from Rs. 13.26 to Rs. 26 per share. After issuing equity shares at par on incorporation, it raised further equity in the price range of Rs. 20 to Rs. 65 per share between March 2010 and December 2014. It has also issued bonus shares in the ratio of 3 shares for every 2 shares held in July 2017. Post issue, its current paid up equity capital of Rs. 3.33 crore will stand enhanced to Rs. 4.97 crore.

On performance front, SMVD has (on a consolidated basis) posted turnover/net profits of Rs. 23.80 cr. / Rs. –(0.20) cr. (FY14), Rs. 29.39 cr. / Rs. 0.07 cr. (FY15), Rs. 29.82 cr. / Rs. 0.06 cr. (FY16) and Rs. 36.13 cr. / Rs. 1.19 cr. (FY17). For four months ended on 31.07.17 of the current fiscal, it has reported net profit of Rs. 0.60 crore on a turnover of Rs. 17.17 crore. Thus last sixteen months performance is a bit surprising. Issue is priced at a P/BV of 2.34 on the basis of its NAV as on 31.07.17 and at a P/BV of 1.80 on the basis of its post issue NAV. For last three fiscals it has posted an average EPS of Rs. 1.89 and an average RoNW of 8.87% on an equity capital of Rs. 1.33 crore. If we annualize latest earnings and attribute it on post issue equity capital then asking price is at a P/E of around 15 against industry average of around 18. Thus issue appears fully priced.

On merchant banker’s front, this is the 3rd mandate from its stable in past three years. The only listing (Shish Ind.) took place at a premium of around 7% on the day of listing.

Conclusion: Considering fully priced issue with a surprising performance for last sixteen months period, risk savvy cash surplus investors may consider investment for long term. (Other).


Conclusion / Investment Strategy

Considering fully priced issue with a surprising performance for last sixteen months period, risk savvy cash surplus investors may consider investment for long term. (Other).

Review By Dilip Davda on Dec 11, 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

SMVD Ploy Pack IPO FAQs

  1. 1. Why SMVD Ploy Pack IPO?

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

  2. 2. How is SMVD Ploy Pack IPO?

    Read the SMVD Ploy Pack IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. SMVD Ploy Pack IPO what should investors do?

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

  4. 4. Is SMVD Ploy Pack IPO good?

    Our recommendation for SMVD Ploy Pack IPO is to subscribe for long term.

  5. 5. Is SMVD Ploy Pack IPO worth Investing?

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

  6. 6. When will SMVD Ploy Pack IPO allotment status?

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

  7. 7. When will SMVD Ploy Pack IPO list?

    The SMVD Ploy Pack IPO will list on Tuesday, December 26, 2017, at NSE SME.