Starlit Power Systems Limited IPO Review (Avoid)

Review By Dilip Davda on Sep 27, 2014

Starlit Power Systems Limited (SPSL) belongs to diversified Starlit Group. It is engaged in Smelting of Battery & Lead Scrap, manufacture, supply and export of pure lead, different Lead Alloys like Calcium Aluminum alloy Antimonial Alloy and Selenium Alloy, Lead Oxides like Lead Sub Oxide and Red Lead. SPSL has the smelting capacity of 15000 MT per annum and refining/alloying capacity of over 12000 MT per annum with technical capacity to convert assorted heterogeneous lead scrap into pure lead of up to 99.98 % purity.

It uses its captive producer gas as a fuel for all smelting and refining operations thereby considerably reducing dependence on Hydro-carbons like furnace oil and diesel. The biomass gassifier technology is Developed by TERI and approved by Ministry of New & Renewable Energy, Government of India.

Recently, SPSL has commissioned its battery project with the capacity to produce 10,000 batteries for automotive and inverter applications. Lead being an essential input in battery manufacturing and comprising over two-third of the battery cost, for this forward integration of converting the Company produced lead into batteries was a logical step forward for the Company. This project has gone on stream in July, 2014.

To part finance its needs of corporate funds, the company is coming out with an IPO of 1640000 equity share of Rs. 10 each at a fixed price of Rs. 18 per share to mobilize Rs. 2.95 crore. Issue opens for subscription on 29.09.14 and will close on 10.10.14. Minimum application is to be made for 8000 shares and in multiples thereon, thereafter. Issue is lead managed by Sarthi Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Post issue, shares will be listed on BSE SME. Present paid up equity capital of the company is Rs. 4.48 crore that will enhance to Rs. 6.12 crore post IPO.

On performance front, it has posted turnover of Rs. 30.58 crore (2012-13) and Rs. 42.62 crore (2013-14) with a net profit of Rs. 0.30 crore and Rs. 0.04 crore respectively. If we attribute latest earnings on fully diluted equity post IPO then asking price is at a P/E of 180 which makes it a costly bet.

On merchant banker’s front, this is the 6th mandate and past mandates have mixed trends.


Conclusion / Investment Strategy

Avoid this costly bet that also has entry barrier on application as well as on trading post listing.

(Disclaimer: Author has no plans to invest in this IPO)

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Sep 27, 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

Starlit Power IPO FAQs

  1. 1. Why Starlit Power IPO?

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

  2. 2. How is Starlit Power IPO?

    Read the Starlit Power IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Starlit Power IPO what should investors do?

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

  4. 4. Is Starlit Power IPO good?

    Our recommendation for Starlit Power IPO is to avoid.

  5. 5. Is Starlit Power IPO worth Investing?

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

  6. 6. When will Starlit Power IPO allotment status?

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

  7. 7. When will Starlit Power IPO list?

    The Starlit Power IPO will list on Wednesday, October 22, 2014, at BSE SME.








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