Review By on September 18, 2017
Airo Lam Ltd. (ALL) is engaged in manufacturing of Hi Pressure decorative laminates. With its wide range of designs, it is competing with dominant players. Its plant is located at Himmatnagar, Sabarkantha, Gujarat. ALL’s distribution network includes more than 70 distributors across 20 states and 3 stock points at Mumbai, Kolkata and Bengaluru. It also exports its products to countries like UAE, Syria, Kuwait, Bangladesh, Dubai, Singapore, Iran etc. ALL’s products are sold under “Airo”, “iLAM”, “Clasico” and “iLITE”.
To part finance its working capital and general corpus fund needs, ALL is coming out with a maiden IPO of 4000000 equity share of Rs. 10 each via book building route with a price band of Rs. 36 – Rs. 38 per share to mobilize Rs. 14.40 cr. to Rs. 15.20 cr. (based on lower and upper price bands). Issue opens for subscription on 25.09.17 and will close on 27.09.17. 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 is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.67% of fully diluted post issue paid up equity capital of the company. Having issued initial equity at par between October 2007 and August 2008, it issued further equity at a price of Rs. 50 per share from November 2008 to February 2009 and has also issued bonus shares in the ratio of 1 for 1 in August 2017. Post issue its current paid up equity capital of Rs. 11.00 crore will stand enhanced to Rs. 15.00 crore.
On performance front, ALLL has posted turnover/net profits of Rs. 64.17 cr. / Rs. 1.48 cr. (FY14), Rs. 67.23 cr. / Rs. 1.60 cr. (FY15), Rs.64.06 cr. / Rs. 1.67 cr. (FY16) and Rs. 71.47 cr. / Rs. 1.89 cr. (FY17). It suffered a setback in top line for FY16 but maintained growth in bottom lines. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 22 plus. It’s trade receivables has gone up from Rs. 30.47 crore in FY16 to Rs. 36.60 crore in FY17 that raises concern. For last three fiscals, ALL has posted an average EPS of Rs. 1.61 on a paid up equity capital of Rs. 5.50 crore with an average RoNW of 11.13%. Issue is priced at a P/BV of 2.4. Thus issue appears fully priced.
On merchant banker’s front, this is the 49th mandate from Pantomath in last three years. Out of last 10 recent listings, 1 opened at discount, 1 at par and the rest with 1 to 18% premium on IPO price.
Conclusion: Considering fully priced issue, risk savy cash surplus investors may consider it for long term.
Review By on September 18, 2017
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 Airo Lam Ltd. offers an early investment opportunity in Airo Lam Ltd.. A stock market investor can buy Airo Lam IPO shares by applying in IPO before Airo Lam Ltd. shares get listed at the stock exchanges. An investor could invest in Airo Lam IPO for short term listing gain or a long term.
Read the Airo Lam IPO recommendations by the leading analyst and leading stock brokers.
Airo Lam IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Airo Lam IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Airo Lam IPO?"
Our recommendation for Airo Lam IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Airo Lam IPO.
The Airo Lam IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Airo Lam IPO allotment status to check.
