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Review By Dilip Davda on September 25, 2017
Tirupati Forge Ltd. (TFL) is engaged in manufacturing of closed die forged products like auto component, bearings, gears etc and forged flanges of mild steel, carbon steel, stainless steel etc. based out at Rajkot, Gujarat. The company was initially set up to cater requirements of international market mainly to US and gradually, it started exporting to Italy, Morocco etc as well as in domestic market.
To part finance its repayment of loans, working capital and general corpus fund needs, TFL is coming out with a maiden IPO of 1800000 equity share of Rs. 10 each at a fixed price of Rs. 29 per share to mobilize Rs. 5.22 crore. Issue opens for subscription on 29.09.17 and will close on 04.10.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. Issue constitutes 30.97% of the post issue paid up equity capital of the company. After having raised initial equity at par, it issued further equity in the price range of Rs. 11 and Rs. 20 between June 2013 and August 2017. It has also issued bonus shares in the ratio of 22 shares for every 10 shares held in June 2017. Post issue, its current paid up equity capital of Rs. 4.01 crore will stand enhanced to Rs. 5.81 crore.
On performance front, TFL has reported turnover/net profits of Rs. 7.04 cr. / Rs. –(0.01) cr. (FY14), Rs. 30.37 cr. / Rs. 0.70 cr. (FY15), Rs. 18.28 cr. / Rs. 0.17 cr. (FY16) and Rs. 16.37 cr. / Rs. 0.51 cr. (FY17). TFL has posted average EPS of Rs. 1.70 and average RoNW of 17.66% for last three fiscals on an equity base of Rs. 0.79 cr. Issue is priced at a P/BV of 2.67. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 33 which is equal to industry average. Thus issue appears aggressively priced. Last two fiscals performance with declined top and bottom lines not justifying the asking price.
On merchant banker’s front, this is the 51st mandate from Pantomath in last three years. Out of last 10 recent listings, 1 opened at discount, 1 at par and the rest with 1 to 18% premium on IPO price.
Conclusion: Considering aggressive pricing, risk savvy cash surplus investors may consider investment for long term.
Review By Dilip Davda on September 25, 2017
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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. 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 their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About 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.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of Tirupati Forge Ltd offers an early investment opportunity in Tirupati Forge Ltd. A stock market investor can buy Tirupati Forge IPO shares by applying in IPO before Tirupati Forge Ltd shares get listed at the stock exchanges. An investor could invest in Tirupati Forge IPO for short term listing gain or a long term.
Read the Tirupati Forge IPO recommendations by the leading analyst and leading stock brokers.
Tirupati Forge IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Tirupati Forge IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Tirupati Forge IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Tirupati Forge IPO.
The Tirupati Forge IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Tirupati Forge IPO allotment status to check.
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