Vinny Overseas NSE SME IPO review (Subscribe for Long Term)

Review By Dilip Davda on Sep 22, 2018

•    Vinny is a textile sector company
•    It has posted improved financial performance after two static yrs.
•    Issue is priced reasonably priced
•    Weak sentiment for textile sector is major concern.  

ABOUT COMPANY:
Vinny Overseas Ltd. (VOL) is in the processing of fabrics for shirting, suiting and dress materials through manufacturing process of weaving, dyeing, printing and finishing. It procures grey fabric from domestic market and further dyes the same as per the client’s requirements on the basis of quality of fabric, sizing requirements etc. It is also engaged in Job-work/ wholesale cloth merchants and also trade in grey cloth as per the order received from the customer.VOL’s products offering can be largely classified into shirting fabrics, shooting fabrics, polyester fabrics, dress materials and cotton fabrics. The company is also certified as "One Star Export House" by DGFT that is valid up to 2020. It has capacity of processing of 40000000 meter per annum.

ISSUE DETAILS/CAPITAL HISTORY:
To part finance its working capital and general corpus fund needs, VOL is coming out with a maiden IPO of 2592000 equity shares of Rs. 10 each at a fixed price of Rs. 40 per share. The company mulls mobilization of Rs. 10.37 cr. through this float. Issue opens for subscription on 28.09.18 and will close on 03.10.18. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue constitutes 28.19% of the post issue paid up capital of the company. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. while Bigshare Services Pvt. Ltd. is the registrar to the issue. Having issued major equity at par, it raised further equity at a price of Rs. 30 per share in September 2005 and at a price of Rs. 26 in March 2013 (based on Rs. 10 FV). It has also issued bonus shares in the ratio of 1 for 1 in March 2017. Average cost of acquisition of shares by the promoters is Rs. 7.32 per share. Post issue, VOL’s current paid up equity capital of Rs. 6.60 cr. will stand enhanced to Rs 9.19 cr.

FINANCIAL PERFORMANCE:
On performance front, for last four fiscals, VOL has posted turnover/net profits of Rs. 87.35 cr. / Rs. 0.98 cr. (FY15), Rs. 98.30 cr. / Rs. 1.11 cr. (FY16), Rs. 98.34 cr. / Rs. 1.70 cr. (FY17) and Rs. 130.54 cr. / Rs. 3.08 cr. (FY18). After two static fiscals, it has posted big jump in top line for FY18. For last three fiscals it has posted an average EPS of Rs. 3.47 and an average RoNW of 15.48%. Issue is priced at a P/BV of 1.63 based on its NAV of Rs. 24.49 as on 31.03.18 and at a P/BV of 1.39 based on post issue NAV of Rs. 28.87. If we consider FY18 earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 12 against industry average of 57.

COMPARE WITH LISTED PEERS:
As per offer documents, it has shown Vishal Fabrics, Dhanlaxmi Fabrics, Aarvee Denim as its listed peers that are currently trading at a P/Es of around 184, 16 and 15 respectively. (as on 21.09.18). Thus issue appears reasonably priced.

MERCHANT BANKER’S TRACK RECORD:
On merchant banker’s front, this is 83rd mandate from its stable in last four fiscals. Out of last 10 listings, 1 opened at par and the rest with a premium ranging from 0.5% to 8% on the day of listing.


Conclusion / Investment Strategy

Although issue is priced reasonably, weak sentiment for the textile sector makes it a long term bet. Investors looking for long term investment may consider parking of funds.

Reviewer recommends Subscribing to the issue for Long Term.

Review By Dilip Davda on Sep 22, 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

Vinny Overseas IPO FAQs

  1. 1. Why Vinny Overseas IPO?

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

  2. 2. How is Vinny Overseas IPO?

    Read the Vinny Overseas IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Vinny Overseas IPO what should investors do?

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

  4. 4. Is Vinny Overseas IPO good?

    Our recommendation for Vinny Overseas IPO is to subscribe for long term.

  5. 5. Is Vinny Overseas IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Vinny Overseas IPO.

  6. 6. When will Vinny Overseas IPO allotment status?

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

  7. 7. When will Vinny Overseas IPO list?

    The Vinny Overseas IPO will list on Thursday, October 11, 2018, at NSE SME.

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