Review By Dilip Davda on March 12, 2018
Advitiya Trade India Ltd. (ATIL) is a multi product trading organisation operating in Aluminium and metal products, Fabrics, Printers and other such profitable product segments in Northern India.
To part finance its working capital and general corpus fund needs, ATIL is coming out with a maiden IPO of 2872000 equity shares of Rs. 10 each with a fixed price of Rs. 15 per share to mobilize Rs.4.31 crore. Issue opens for subscription on 14.03.18 and will close on 16.03.18.Minimum application is to be made for 8000 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 Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 28.97% of the post issue paid up capital of the company. Average cost of acquisition of shares by the promoters is Rs. 11.02 and Rs. 15.00 per share. After initial equity issue at par, it raised further equity in the price range of Rs. 10 and Rs. 15 between March 2017 and January 2018. Post issue, its current paid up equity capital of Rs. 7.04 cr. will stand enhanced to Rs. 9.91 cr.
As the company has been recently incorporated, it has a limited period performance. As per offer documents, it has posted a turnover of Rs. 19.72 crore with a net profit of Rs. 0.36 crore for the period ended 30.11.17 of the current fiscal. It has posted an EPS of Rs. 0.66. RoNW is not available due to part period working so far. Issue is priced at a P/BV of 1.31 on the basis of its NAV of Rs. 11.41 as on 30.11.17 and at a P/BV of 0.96 on the basis of post issue NAV of Rs. 15.55. It has no listed peers to compare with. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 27 thus it is priced aggressively.
On merchant banker’s front, this is 27th 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.
An aggressively priced offer from a company having very little performance is a risky bet. There is no harm in giving it a miss.
Review By Dilip Davda on March 12, 2018
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 Advitiya Trade India Ltd. offers an early investment opportunity in Advitiya Trade India Ltd.. A stock market investor can buy Advitiya Trade IPO shares by applying in IPO before Advitiya Trade India Ltd. shares get listed at the stock exchanges. An investor could invest in Advitiya Trade IPO for short term listing gain or a long term.
Read the Advitiya Trade IPO recommendations by the leading analyst and leading stock brokers.
Advitiya Trade IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Advitiya Trade IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Advitiya Trade IPO?"
Our recommendation for Advitiya Trade IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Advitiya Trade IPO.
The Advitiya Trade IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Advitiya Trade IPO allotment status to check.
