Sungold Media BSE SME IPO review (Avoid)

Review By Dilip Davda on Aug 4, 2018

•    Company changed its original business and rechristened
•    Financial performance is lacking and raising concern.
•    Even though issue is at par, it is a costly bet.
•    Segment is not having fancy among invetors.

About Company:
Sungold Media and Entertainment Ltd. (SMEL) – (erstwhile known as Shree Krishna Holiday Homes and Farms Ltd.). Earlier the Company was engaged in the business of marketing, development and maintenance of Farm Houses, Holidays Resorts, and Housing Society etc. Pursuant to the change of object, it is currently engaged in the media and entertainment services.  Now SMEL provides a complete solution for branding of clients business. It is doing graphics design, web site design, Video Editing, Digital Marketing, Photography, Videography, Mobile App Development, Celebrity Management and distribution services. Company designs and develops optimal solutions that maximize its clients brand image. Currently SMEL has some ongoing projects i.e. www.liveupdates.co.in, www.entertainment365.in, www.gujaratdevelopment.com. ,

Issue details:
To achieve the benefit of listings, SMEL is coming out with a maiden IPO as offer for sale of 1350000 equity shares of Rs. 10 each at par to mobilize Rs. 1.35 crore. Issue opens for subscription on 09.08.18 and will close on 14.08.18. Minimum application is to be made for 10000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue constitutes 27% of the post issue paid up capital of the company. Issue is solely lead managed by Finshore Management Services Ltd. and Satellite Corporate Services Pvt. Ltd. is the registrar to the issue. Most of the equity is issued at par except few shares at a price of Rs. 25 per share in February 2004 and 1095020 shares at Rs. 13.10 per share in March 2014. It has also issued bonus shares in the ratio of 1.428 shares for every 10 shares held in February 2013. Average cost of acquisition of shares by promoters is Rs. 10.00 and Rs. 10.36 per share. This being offer for sale, post issue paid up capital remains same at Rs. 5 crore.

Financial performance:
On performance front, for last three fiscals, SMEL has reported revenue/net profits of Rs. 0.35 cr. / Rs. 0.06 cr. (FY15), Rs. 0.56 cr. / Rs. 0.09 cr. (FY16), Rs. 0.60 cr. / Rs. 0.05 cr. (FY17). For the 11 months period ended on 28.02.18 of FY18 it has posted net profit of Rs. 0.03 cr. on revenue of Rs. 0.45 cr. For last three fiscals, it has posted an average EPS of Rs. 0.16 and an average RoNW of 1.39$. Issue is priced at a P/BV of 0.90 on the basis of its NAV of Rs. 11.16 as on 28.02.18. If we attribute latest earnings on the post issue equity then asking price is at a P/E of around 1515 against industry composite of 27. Thus even though issue is at par, it is turning costly affair.

Peers comparison:
As per offer documents, it has shown Balaji Tele, Cineline India and Eros Intl. as its listed peers that are not at all comparable with this company’s business model. They are currently trading at a P/E of around NA, 14 and 5 as on 03.08.18. Thus this segment is lacking investors’ fancy.

Merchant Banker’s track record:
On merchant banker’s front, this is the 2nd mandate from its stable. Only 1 listing that took place so far opened at a premium of 0.02% on the day of listing.


Conclusion / Investment Strategy

Even though issue is at par, highly competitive business model coupled with legging financial performance is making it a costly bet. There is no harm in giving this issue a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Aug 4, 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

Sungold Media Entertainment IPO FAQs

  1. 1. Why Sungold Media Entertainment IPO?

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

  2. 2. How is Sungold Media Entertainment IPO?

    Read the Sungold Media Entertainment IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Sungold Media Entertainment IPO what should investors do?

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

  4. 4. Is Sungold Media Entertainment IPO good?

    Our recommendation for Sungold Media Entertainment IPO is to avoid.

  5. 5. Is Sungold Media Entertainment IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Sungold Media Entertainment IPO.

  6. 6. When will Sungold Media Entertainment IPO allotment status?

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

  7. 7. When will Sungold Media Entertainment IPO list?

    The Sungold Media Entertainment IPO will list on Monday, August 27, 2018, at BSE SME.

1 Comments

Market first
1. Market first  Aug 5, 2018 19:56
Sir,
Please spend some time to review Powerful technology ipo also.
Eagerly waiting.
Thanks in advance.








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