Sylph Education Solutions IPO review (Avoid)

Review By Dilip Davda on Feb 9, 2016

Sylph Education Solutions (SES) is engaged in providing educational services in the field of information technology (I.T) which is comprises of providing basic I.T training at two centers namely "Little Wonder", a primary school and "IT Gurus".  The company is tutoring basic computer knowledge, internet, surfing, computer courses like Microsoft office, accounting and financial management, inventory management, statutory capabilities, tally.net capabilities, accounting courses like tally, various computer languages i.e C++,.Net, Java and Oracle, communication and soft skills etc. Its revenue comprises of sale of software, skill development fees, services provided to school and interest income. However, at present company is not providing services to the school.

To part finance set up of two new centers for establishment of projects for skill development, raising general corpus fund, the company is coming out with a maiden public issue of 4000000 equity share of Rs. 10 each at a fixed price of Rs. 12 per share to mobilize Rs. 4.80 crore. Issue opens for subscription on 10.02.16 and will close on 15.02.16. Minimum application is to be made for 10000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is lead managed by Corporate Strategic Allianz Ltd and Purva Sharegistry India Pvt Ltd is the registrar to the issue. The company that issued initial equity at par in 2010 and 2012 has raised money at a premium price of Rs. 100 each (FV Re. 1) in March 2012, at Rs. 22.75 in February 2014 (FV Re. 1), at Rs. 225 per share (FV Rs. 10) in March 2014, at Rs. 112.50 (FV Rs. 10) between April-June 2014 and has issued two bonus issues in the ratio of 1 for 1 (April 2014) and 10 for 1 (July 2015). Its current paid up equity capital of Rs. 11 crore will stand enhanced to Rs. 15 crore post this issue.

On performance front, the company’s top/ bottom line has seen growth from Rs. 0.11 crore/Rs. 0.002 crore (FY 2013) to Rs. 0.46 crore/Rs. 0.07 crore (FY 2015). For six months ended 30.09.15 it has posted net profit of Rs. 0.03 crore on a turnover of Rs. 0.18 crore. If we annualize and attribute these earnings on fully diluted equity post IPO then asking price is at a P/E of 3000 and thus based on its revenue and earnings track records so far, it is aggressively priced offer.

On merchant banker’s front, it has poor track record for its past mandates. This is the sixth IPO from its stable.


Conclusion / Investment Strategy

Considering track record of performance and aggressive pricing, there is no harm giving this expensive offer a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Feb 9, 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

Sylph Education IPO FAQs

  1. 1. Why Sylph Education IPO?

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

  2. 2. How is Sylph Education IPO?

    Read the Sylph Education IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Sylph Education IPO what should investors do?

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

  4. 4. Is Sylph Education IPO good?

    Our recommendation for Sylph Education IPO is to avoid.

  5. 5. Is Sylph Education IPO worth Investing?

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

  6. 6. When will Sylph Education IPO allotment status?

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

  7. 7. When will Sylph Education IPO list?

    The Sylph Education IPO will list on Tuesday, February 23, 2016, at BSE SME.

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