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Yasho Industries BSE SME IPO review (May apply)

Review By Dilip Davda on Mar 18, 2018

Yasho Industries Ltd. (YIL) is engaged in the manufacturing of varied re-engineered chemicals like Aroma Range, Food Antioxidant Range, Lune & Rubber Range and other Specialty Range. It has two manufacturing units at Vapi in Gujarat.  Company has pre-registered certain products under REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) Regulation, wherein the manufacturers and importers of substances have a general obligation to submit a registration to the European Chemicals Agency for each substance manufactured or imported in quantities of 1 tonne or more per year per company. YIL exports some of its products to European countries and hence has pre-registered certain products under REACH Regulation. It has received various certifications confirming its products to be in line with National and International Standards i.e. HALAL Certifications, STAR KOSHER Certifications, NSF Certifications, FAMIQS Certification, FSSC Certification.

To part finance its expansion and up-gradation of existing facilities,  YIL is coming out with a maiden IPO of 2899200 equity shares of Rs. 10 each comprising fresh equity issue of 899200 shares and 2000000 shares by way of offer for sale (OFS) at a fixed price of Rs. 100 per share to mobilize Rs.28.99 crore. Issue opens for subscription on 19.03.18 and will close on 21.03.18. Minimum application is to be made for 1200 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Aryaman Financial Services Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.60% of the post issue paid up capital of the company. Average cost of acquisition of the shares by the promoters is Rs. 10 per share. Its entire equity is issued at par so far. Post issue, its current paid up capital of Rs. 10 cr. will stand enhanced to Rs. 10.90 cr.

On performance front, YIL has posted turnover/net profits of Rs. 157.02 cr. / Rs. –(1.47) cr. (FY14), Rs. 171.35 cr. / Rs. 0.06 cr. (FY15), Rs. 180.08 cr. / Rs. 1.53 cr. (FY16) and Rs. 198.40 cr. / Rs. 3.67 cr. (FY17). For the first half of current fiscal, it has earned net profit of Rs. 1.95 cr. on a turnover of Rs.109.59 cr. For last three fiscals, it has posted an average EPS of Rs. 2.58 and an average RoNW of 14.47%. Issue is priced at a P/BV of 5.21 on the basis of its NAV of Rs. 19.20 as on 30.09.17 and at a P/BV of 3.86 on the basis of its post issue NAV of Rs. 25.91. If we annualize latest earnings and attribute it on fully diluted post issue equity then asking price is at a P/E of around 28 against industry average of 31. As per offer documents, listed peers are trading at a P/E of Nocil (23), Himadri Chem. (32), Amines and Plasti (23), Camphor & Allide (22), S H Kelkar (58) and Transpek Ind. (28) (as on 16.03.18). Thus issue appears fully priced.

On merchant banker’s front, this is 30th 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.


Conclusion / Investment Strategy

Issue is fully priced; hence cash surplus risk savvy investors may consider investment for long term.

Review By Dilip Davda on Mar 18, 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

Yasho Industries IPO FAQs

  1. 1. Why Yasho Industries IPO?

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

  2. 2. How is Yasho Industries IPO?

    Read the Yasho Industries IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Yasho Industries IPO what should investors do?

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

  4. 4. Is Yasho Industries IPO good?

    Our recommendation for Yasho Industries IPO is to subscribe for long term.

  5. 5. Is Yasho Industries IPO worth Investing?

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

  6. 6. When will Yasho Industries IPO allotment status?

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

  7. 7. When will Yasho Industries IPO list?

    The Yasho Industries IPO will list on Monday, April 2, 2018, at BSE SME.