Soni Soya NSE SME IPO review (Apply at your own risk)

Review By Dilip Davda on Mar 21, 2018

Soni Soya Products Ltd. (SSPL) is  engaged in the business of processing and trading of organic and Non- genetically modified organisms (non-GMO) agricultural products such as Soya, Maize ( Corn), Wheat, Flax seeds and Mustard, Oil, Rice, Pulses, Herbs, Spices, and other grains. It is  registered with U.S. Food and Drug Administration pursuant to the Federal Food Drug Cosmetic Act, as amended by the Bioterrorism Act of 2002 and the FDA Food Safety Modernization Act and with Agricultural and Processed Food Products Export Development Authority of Government of India (APEDA) to export such scheduled products as per APEDA Act, 1985. Apart from these, it is accredited with other various certifications namely, National Programme for Organic Production(NPOP), India and the National Organic Program (NOP) technical standards (USA) and INDOCERT Organic Standard for Non - EU Country Operators. SSPL’s customer base is spread across the globe with presence in countries like Canada, Dubai, South Korea,Sri Lanka, United States of America. The majority of sales revenues are through direct exports which contributed 97.71%, 82.05% and 67.84% respectively to total sales revenue for the financial year ended March 31, 2015, 2016, and 2017 respectively.

To part finance its working capital and general corpus fund needs, SSPL is coming out with a maiden IPO of 1800000 equity shares of Rs. 10 each with a fixed price of Rs. 25 per share to mobilize Rs. 4.50 crore. Issue opens for subscription on 28.03.18 and will close on 04.04.18. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue constitutes 34.92% of the post issue paid up capital of the company. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Having issued initial equity at par, it raised further equity in the price range of Rs. 25 to Rs. 250 per share. It has also issued bonus shares in the ratio of 15 for 1 in August 2017. Average cost of acquisition of shares by the promoters is Rs. 10.13 and Rs. 10.34 per share. Post issue, SSPL’s current paid up equity capital of Rs. 3.36 cr. will stand enhanced to Rs. 5.16 cr.

On performance front, SSPL has posted turnover/net profits of Rs. 8.00 cr. / Rs. 0.21 cr. (FY15), Rs. 15.19 cr. / Rs. 0.08 cr. (FY16), Rs. 28.77 cr. / Rs. 0.50 cr. (FY17). For first half of current fiscal it has earned net profit of Rs. 0.75 cr. on a turnover of Rs. 35.22 cr. which is surprising. Rising turnover with inconsistency in bottom line is a major concern. For last three fiscals it has posted an average EPS of Rs. 1.40 and an average RoNW of 27.83%.  Issue is priced at a P/BV of 1.51 on the basis of its NAV of Rs. 16.59 as on 30.09.17 and at a P/BV of 1.38 on the basis of its post issue NAV of Rs. 18.16. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 9 against industry average of 24. It has shown Ruchi Soya, LT Foods, Gokul Agro, Kriti Nutri, Shanti Overseas and Sanwaria Consumer as its listed peers which are trading at a P/E of around –(0.09),58,19,18,7 and 11 (as on 21.03.118 closing on BSE). Issue appears fully priced if we consider nearest peers like Ruchi, Shanti and Sanwaria.

On merchant banker’s front, this is 67th mandate from its stable in last three fiscals. Out of last 10 listings, 1 opened at discount to offer price, 1 just Rs. 0.05 paisa up on offer price, 7 with a premium ranging from 4% to 20% and 1 (main board issue) with a premium of 130% on the offer price on the day of listing.


Conclusion / Investment Strategy

Considering fully priced offer, cash surplus risk savvy investors may consider investment at their own risk.

Review By Dilip Davda on Mar 21, 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

Soni Soya IPO FAQs

  1. 1. Why Soni Soya IPO?

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

  2. 2. How is Soni Soya IPO?

    Read the Soni Soya IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Soni Soya IPO what should investors do?

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

  4. 4. Is Soni Soya IPO good?

    Sorry, we didn't rate the Soni Soya IPO.

  5. 5. Is Soni Soya IPO worth Investing?

    Our lead analyst Mr. Dilip Davda didn't rate the Soni Soya IPO.

  6. 6. When will Soni Soya IPO allotment status?

    The Soni Soya IPO allotment status will be available on or around Apr 9, 2018. The allotted shares will be credited in demat account by Apr 11, 2018. Visit Soni Soya IPO allotment status to check.

  7. 7. When will Soni Soya IPO list?

    The Soni Soya IPO will list on Thursday, April 12, 2018, at NSE SME.








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