Yash Chemex BSE SME IPO review (Avoid)

Review By Dilip Davda on Jun 3, 2016

Yash Chemex Ltd (YCL) is a SMERA rated company engaged in importing and trading of dyes, chemicals and intermediates for textile and garment industry, water treatment industry, laminate industry, agrochemicals, adhesives, metal industry etc. The products focused are Tobias Acid, Beta Nephthol, Suplho Tobias Acid, J Acid, H Acid, Bon Acid and Melamine.

To meet its working capital requirements and raise general corpus fund, the company is coming out with a maiden IPO of 1092000 equity share of Rs. 10 each at a fixed price of Rs.23 per share to mobilize Rs. 2.51 crore.  Issue opens for subscription on 07.06.16 and will close on 10.06.16. Minimum application is to be made for 6000 shares and in multiple thereon, thereafter. After initial contribution at par, the company raised further equity at a price of Rs. 40 in December 2009 and March 2014. In March 2011 it allotted few shares at a price of Rs. 100 per share. It also issued bonus shares in the ratio of 1 for 3 in November 2015 and the issued further equity at a price of Rs. 20 per share in January 2016. Post IPO the existing paid up equity capital of Rs. 3.01 crore will stand enhanced to Rs. 4.10 crore.

Issue is solely managed by Pantomath Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue.  Post allotment, shares will be listed on BSE SME.

On performance front, the company has posted turnover and net profit of Rs. 69.35 cr. / Rs. 0.08 cr. (FY14), Rs. 74.19 cr./ Rs. 0.09 cr. (FY15). For 10 months ended 31.01.16 it has posted net profit of Rs. 0.17 crore on a turnover of Rs. 48.63 crore. Surge in net profit is due to reduced finance cost. It we attribute current earnings on annualized basis on fully diluted equity post IPO then asking price is at a P/E of 46 plus making it highly priced issue.  There is no listed peer to compare with, as stated in the prospectus of the company.

On merchant banker’s front, this is the 19th IPO from its stable and earlier IPOs have shown mixed trends post listings.


Conclusion / Investment Strategy

As the issue is aggressively priced, risks aver investors with cash surplus may consider investment for long term.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Jun 3, 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

Yash Chemex IPO FAQs

  1. 1. Why Yash Chemex IPO?

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

  2. 2. How is Yash Chemex IPO?

    Read the Yash Chemex IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Yash Chemex IPO what should investors do?

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

  4. 4. Is Yash Chemex IPO good?

    Our recommendation for Yash Chemex IPO is to avoid.

  5. 5. Is Yash Chemex IPO worth Investing?

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

  6. 6. When will Yash Chemex IPO allotment status?

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

  7. 7. When will Yash Chemex IPO list?

    The Yash Chemex IPO will list on Monday, June 20, 2016, at BSE SME.

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