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Review By Dilip Davda on March 12, 2018
Uravi T and Wedge Lamps Ltd. (UTWL) is a lamps and lighting products manufacturing and distribution company with core focus on automotive lamps and instrument cluster lighting. It specializes in manufacturing and distributing Stop and Tail Lamps /Signal Lamps /Indicator Lamps and Wedge Lamps for Two-wheelers, Four-wheelers, Tractors and Industrial applications for various Indian automobile manufacturers. UTWL is ISO/TS certified and holds certifications from the Automotive Research Association of India and E-mark for the products manufactured. Keeping in line with the current technological advancements in the field of automobile and home lighting, it has recently entered into a co-operation agreement with a Philippines based company named Global Lighting Phils. Inc for developing LED lighting products vertical of. The LED lamps are manufactured by Global Lighting Phils. Inc. under the brand name “UVAL” and are imported, distributed and sold in India by UTWL. It has recently entered into trading of LED Lamps.
To part finance its working capital and general corpus fund needs, UTWL is coming out with a maiden IPO of 1500000 equity shares of Rs. 10 each (comprising 500000 fresh equity shares and 1000000 shares by way of offer for sale) at a fixed price of Rs. 100 per share to mobilize Rs. 15.00 crore. Issue opens for subscription on 16.03.18 and will close on 20.03.18. Minimum application is to be made for 1200 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Aryaman Financial Services Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 27.27% of the post issue paid up capital of the company. Average cost of acquisition of shares by the promoters is Rs. 10 per share. Entire equity of the company is issued at par. Post issue, its current paid up equity capital of Rs. 5.00 crore will stand enhanced to Rs. 5.50 crore.
On performance front, UTWL has posted turnover/net profits of Rs. 25.85 cr. / Rs. 0.58 cr. (FY14), Rs. 27.36 cr. / Rs. 0.83 cr. (FY15), Rs. 29.60 cr. / Rs. 0.94 cr. (FY16) and Rs. 29.16 cr. / Rs. 1.05 cr. (FY17). Thus is has shown gradual increase in turnover and net profits. For the first half of current fiscal, it has earned net profit of Rs. 1.56 cr. on a turnover of Rs. 16.45 cr. which is a bit surprising. For last three fiscals, it has posted an average EPS of Rs. 1.95 and RoNW of 9.64%. Issue is priced at a P/BV of 4.05 on the basis of its NAV of Rs. 24.68 as on 30.09.17 and at a P/BV of 3.19 on the basis of its post issue NAV of Rs. 31.35. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/ E of around 17 against industry composite of 47. As per offer documents it has shown Autolite India, Fiem Ind., Jagan Lamps as its peers and are trading at a P/E of around –(20), 31 and 23 (as on 12.03.18). Thus pricing appears reasonable. But will it sustain the growth in bottom line is a major concern.
On merchant banker’s front, this is 28th mandate from its stable in the past three years (includes 1 main board IPO and the rest SME). Out of last 10 listings, 4 opened at discount, 1 at par, 4 with the premium ranging from 1% to 20%. The only main board listing (Apollo Micro) opened at a premium of around 73.8% on the day of listing.
Although pricing appears reasonable, its higher profit for first half is a bit surprising. Cash surplus risk savvy investors may consider for long term investment.
Review By Dilip Davda on March 12, 2018
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 Uravi T and Wedge Lamps Ltd offers an early investment opportunity in Uravi T and Wedge Lamps Ltd. A stock market investor can buy Uravi T and Wedge Lamps IPO shares by applying in IPO before Uravi T and Wedge Lamps Ltd shares get listed at the stock exchanges. An investor could invest in Uravi T and Wedge Lamps IPO for short term listing gain or a long term.
Read the Uravi T and Wedge Lamps IPO recommendations by the leading analyst and leading stock brokers.
Uravi T and Wedge Lamps IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Uravi T and Wedge Lamps IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Uravi T and Wedge Lamps 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 Uravi T and Wedge Lamps IPO.
The Uravi T and Wedge Lamps IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Uravi T and Wedge Lamps IPO allotment status to check.
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