Review By on December 12, 2014
Amsons Apparels Ltd. (AAL): The Company is currently engaged in the business of trading of fabrics. It’s a multi-product fabric trading Company and its range includes fabrics for Silk, Polyester, Lace Fabrics, Netting Fabrics, Coarse Cotton Fabric, suiting, shirting, linen, jute and other fabrics. AAL primarily cater to retailers in Delhi and NCR Regions, wherein it supply mid range of unstitched fabrics.
To meet its working capital and general corpus fund requirement, the company is coming out with its maiden IPO of 3250000 equity share of Rs. 10 each at par to mobilize Rs. 3.25 crore. Its present equity of Rs. 9.03 crore will rise to Rs. 12.28 crore post this issue. Issue opens for subscription on 16.12.14 and will close on 22.12.14. Minimum application is to be made for 10000 shares and in multiples thereof, thereafter. Issue is lead managed by BCB Brokerage Pvt Ltd. and Beetal Financial & Computer Services Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE SME.
On performance front, the company has posted an average EPS of Rs. 1.45 for last three fiscals. For the fiscal ended 31.03.14 it has earned net profit of Rs. 0.04 crore on a turnover of Rs. 3.21 translating into an EPS of Rs. 0.09 on an equity base of Rs. 4.78 crore. For first half of current fiscal it has posted net profit of Rs. 0.02 crore on a turnover of Rs. 2.26 crore translating in to an EPS of Rs. 0.04 on an equity base of Rs. 9.03 crore. Based on first half numbers, if we attribute earnings on fully diluted equity post this issue, even at par value asking price is at a whooping 250 P/E.
On merchant banker’s front, this is the second mandate and it has poor track record.
Although this IPO is at par value, considering high P/E and low preference for SME IPOs among investors and broking community, only HNIs with surplus fund can invest at their own discretion keeping in mind the entry and exit barriers.
(Disclaimer: Author has no plans to invest in this IPO)
Review By on December 12, 2014
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 Amsons Apparels Ltd. offers an early investment opportunity in Amsons Apparels Ltd.. A stock market investor can buy Amsons Apparels IPO shares by applying in IPO before Amsons Apparels Ltd. shares get listed at the stock exchanges. An investor could invest in Amsons Apparels IPO for short term listing gain or a long term.
Read the Amsons Apparels IPO recommendations by the leading analyst and leading stock brokers.
Amsons Apparels IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Amsons Apparels IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Amsons Apparels IPO?"
Our recommendation for Amsons Apparels IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Amsons Apparels IPO.
The Amsons Apparels IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Amsons Apparels IPO allotment status to check.
