Review By on June 28, 2016
Advance Syntex Ltd (ASL) is mainly engaged in manufacturing of Metalized Films (MF), Lacquered (Coated) Metalized Polyester Films (LMPF), glitter powder (Zari Powder) and Metallic Yarn (Polyester Badla). Glitter Powder and Metallic Yarn are manufactured through Job Work of LMPF produced by it. The company also produces modified resins, which is used as raw material in manufacturing of LMPF. Further, ASL is also engaged in the sale of polyester films (also known as BOPET films) and Biaxially Oriented Polypropylene Films (also known as BOPP films) after carrying of slitting operations on them.
Additionally, ASL also provides services of coating of Metalized Films on job work basis. The products are used in textiles, flexible packaging, lamination, printing, decorations, advertising, paints, inks, craft glue, glass bangles, synthetic leather, floor tiles, walls, cosmetics (such as nail polish, eye-liner, hair gel, lipstick etc.) and various other products. It’s entire products are sold under the brand name of “MIDAS”, which is registered under the Trademarks Act, 1999.
To part finance its working capital needs, the company is coming out with a maiden IPO of 2100000 equity share of Rs. 10 each at a fixed price of Rs. 12 per share to mobilize Rs. 2.52 crore. Issue opens for subscription on 30.06.16 and will close on 04.07.16. Minimum application is to be made for 10000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Entire equity of the company is issued at par so far and also a bonus issue in the ratio of 1 for 2 in October 2015. Its current paid up equity capital of Rs. 5.81 crore will stand enhanced to Rs. 7.91 crore post issue. Issue is solely managed by Hem Securities Ltd and Sharex Dynamic (India) Pvt Ltd is the registrar to the issue.
On performance front, for last three fiscals, the company has posted turnover and net profit of Rs. 29.77 cr./ Rs. 0.84 cr. (FY13), Rs. 36.22 cr. / Rs. 0.83 cr. (FY14) and Rs. 47.54 cr. / Rs. 0.61 cr. (FY15). For the first nine months ended 31.12.15 it has posted net profit of Rs. 0.92 crore on a turnover of Rs. 34.22 crore. If we annualize these earnings and attribute it to expanded equity post IPO then asking price is at a P/E of 7 plus. However, its first nine months performance is shown highest profit which is raising eyebrows.
On merchant banker’s front, this is 20th mandate from its stable and earlier mandates have shown average returns post listing.
Conclusion: IPO is priced justifiably; investors with surplus cash may consider long term investment.
Review By on June 28, 2016
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
The initial public offer (IPO) of Advance Syntex Ltd. offers an early investment opportunity in Advance Syntex Ltd.. A stock market investor can buy Advance Syntex IPO shares by applying in IPO before Advance Syntex Ltd. shares get listed at the stock exchanges. An investor could invest in Advance Syntex IPO for short term listing gain or a long term.
Read the Advance Syntex IPO recommendations by the leading analyst and leading stock brokers.
Advance Syntex IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Advance Syntex IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Advance Syntex IPO?"
Our recommendation for Advance Syntex IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Advance Syntex IPO.
The Advance Syntex IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Advance Syntex IPO allotment status to check.
