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Sprayking Agro BSE SME IPO review (May apply)

Review By Dilip Davda on Aug 30, 2016

Sprayking Agro Equipments Ltd (SAEL) is engaged into manufacturing of Brass equipments. It mainly manufactures Brass Agro Equipments and Brass Plumbing components. It can also manufacture auto, electric and other fitting parts made from Brass.

To repay its unsecured loans and raise general corpus funds, the company is coming out with a small issue of 888000 equity shares of Rs. 10 each at a fixed price of Rs. 21 per share to mobilize Rs. 1.86 crore. Issue opens for subscription on 31.08.16 and will close on 02.09.16. Minimum application is to be made for 5000 shares and in multiples thereon, thereafter. Issue is solely lead managed by Pantomath Capital Advisors Pvt Ltd and Sharex Dynamic (India) Pvt Ltd is the registrar to the issue. Since inception in 2005 till 21.03.2011 it issued equity at par. Thereafter it issued equity at a price of Rs. 125 per share on28.03.11 and then at Rs. 21 per share in 2015 and 2016. Its current paid up equity capital of Rs. 2.28 crore will stand enhanced to Rs. 3.17 crore post this issue. Post allotment, shares will be listed on BSE SME.

On performance front, for the last four fiscals, the company has posted turnover / net profit of Rs. 11.31 cr. / Rs. 0.02 cr. (FY13), Rs. 16.40 cr. / Rs. 0.07 cr. (FY14), Rs. 14.36 cr. / Rs. 0.04 cr. (FY15) and Rs. 15.36 cr. / Rs. 0.05 cr. (FY16). If we attribute latest earnings on post issue equity then asking price is at a P/E of 131 plus making it a costly IPO. However, the issue price is below 1 P/BV. It has no peers to compare with as claimed by the company in prospectus.

On merchant banker’s front, this is the 23rd issue from its stable and it has mixed trends for its past mandates.

Conclusion: Based on its earnings the asking price is exorbitant. However, cash surplus risk savvy investors may consider it for long term investment; other may give it a miss.


Conclusion / Investment Strategy

Based on its earnings the asking price is exorbitant. However, cash surplus risk savvy investors may consider it for long term investment; other may give it a miss.

Review By Dilip Davda on Aug 30, 2016

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

Sprayking Agro IPO FAQs

  1. 1. Why Sprayking Agro IPO?

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

  2. 2. How is Sprayking Agro IPO?

    Read the Sprayking Agro IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Sprayking Agro IPO what should investors do?

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

  4. 4. Is Sprayking Agro IPO good?

    Our recommendation for Sprayking Agro IPO is to subscribe for long term.

  5. 5. Is Sprayking Agro IPO worth Investing?

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

  6. 6. When will Sprayking Agro IPO allotment status?

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

  7. 7. When will Sprayking Agro IPO list?

    The Sprayking Agro IPO will list on Wednesday, September 14, 2016, at BSE SME.