Review By on February 19, 2015
Akme Star Housing is registered with NHB and is engaged in is housing finance business. It is aiming to provide home loans finance to weaker sections of the society, group housing societies and NGOs engaged in the welfare of the weaker section. Thus it is consciously targeting markets that are relatively underpenetrated.
To meet its funds requirement and raising corpus fund, it is coming out with a public issue of 16,00,000 equity share of Rs. 10 each at a fixed price of Rs. 30 per share to mobilize Rs. 4.80 crore. Issue opens for subscription on 25.02.15 and will close on 05.03.15. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. After this issue its current equity capital of Rs. 4.33 crore with rise to Rs. 5.93 crore.
On performance front, the company has posted an average EPS of Rs. 1.85 for last three fiscals and NAV is at Rs. 46.74 per share as on 31.03.14 (on an equity capital of Rs. 2.17 crore). For these three fiscals it posted turnover/ net profits of Rs. 0.44 crore/Rs. 0.13 crore (2012), Rs. 0.74 crore/Rs. 0.19 crore (2013) and Rs. 1.37 crore/Rs. 0.37 crore (2014) respectively. There is nothing great. However, this IPO is entering as BSE has revised guidelines for SME IPOs with higher parameters which are not met by this company as it had filed its draft before such announcement.
For the first half of current fiscal it has earned net profit of Rs. 0.24 crore on total income of Rs. 0.95 crore. After subscription for equity at par at the time of MoA it raised further equity at a premium of Rs. 10 to Rs. 50 per share during March 2007 to March 2014 and then issued bonus shares in the ratio of 1 for 1 in September 2014. Thus equity of Rs. 2.17 crore as on 31.03.14 jumped to Rs. 4.33 crore on 30.09.14. Based on its latest equity, the first half EPS is just at 1.11 on annualized basis translating in to P/E of 27 plus and if we attribute the said earnings on post IPO equity then the asking price is at a P/E of 53 plus making it a pricy bet.
Issue is lead managed by Sarthi Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. This is the 8th mandate from lead manager that has average track record for earlier mandates.
On prima facie basis, this SME offer is at higher P/E and low preference for SME IPOs by the broking community at large due to entry barriers, it is not worth. However, HNIs with surplus funds may invest at their own discretion for long term.
Review By on February 19, 2015
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 Akme Star Housing Finance Ltd. offers an early investment opportunity in Akme Star Housing Finance Ltd.. A stock market investor can buy Akme Star Housing Finance IPO shares by applying in IPO before Akme Star Housing Finance Ltd. shares get listed at the stock exchanges. An investor could invest in Akme Star Housing Finance IPO for short term listing gain or a long term.
Read the Akme Star Housing Finance IPO recommendations by the leading analyst and leading stock brokers.
Akme Star Housing Finance IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Akme Star Housing Finance IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Akme Star Housing Finance IPO?"
Our recommendation for Akme Star Housing Finance IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Akme Star Housing Finance IPO.
The Akme Star Housing Finance IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Akme Star Housing Finance IPO allotment status to check.
