Anshu's Clothing Limited IPO Review (Avoid)

Well, secondary market has seen up move to mark the 58 week high on last Friday and main IPOs are still keeping away from primary market, we are seeing just a dozen odd SME platform IPOs mobilizing around 150 crore and some NCD (Debt) Issues that mulled mobilization of Rs. 3000 crore.  During the week first ever EMERGE-NSE/SME platform IPO routed through book building process failed to perform despite improved sentiment of secondary market. On this Monday Comfort Commotrade is getting listed on BE/SME platform. No doubt, Government of India has dared to announce RINL maiden IPO that is likely to open on 16.10.12 and close on 18.10.12, the details on pricing is still waited for. Amidst such scenario, we have one more BSE SME IPO from Anshu's Clothing. Details of the same are as under:

Bhandari group from Ahmedabad is floating an IPO of Anshu's Clothing Ltd. that will offer 1872000 equity share of Rs. 10 each at a price of Rs. 27 per share (i.e. including a premium of Rs. 17 per share) to mobilize Rs. 5.05 crore from primary market, just to meet its long term supply funding. The issue opens for subscription on 26.09.12 and will close on 28.09.12. Minimum application is to be made for 4000 shares and in multiples thereof. First Call India Equity Advisors Pct Ltd is the sole manager to this offer and Cameo Corporate Services Ltd. is the registrar to the issue.

Anshu's Designer Studio is one of the leading fashion house and designer boutiques in Ahmedabad offering online shopping for saris including Indian ethnic wear, Indian wedding saris, wedding bridal saris, evening wear, party wear, Indian designer wear. Our designer wear outfits are adorned with velvet patches, ribbon work, laces, kasab work, resham work, intricate hand embroidery, zircons, crystals, diamonds etc. We use finest quality raw materials and fabrics like net, shimmer, shimmer georgette, shimmer net, pure silk, raw silk, brocade, jamawarm, crepe, georgette etc. to make our outfits attractive and irresistible.

Women's ethnic wear offered by Anshu's Designer Studio are designed by national level fashion designers, who design women wear for Hollywood stars, Indian Film Industry and also for Miss India, Miss Universe, Miss World Competition or wedding wear designs for celebrities. Our exclusive collection includes Designer Sarees, designer Salwar Kameez, Bridal Collection as Bridal Sarees and Bridal Lehnga, partywear lehenga, party wear sarees etc. More than 65 designers are putting in all their talent and honest efforts to give you that most desired exclusive designs that can be found only at Anshu's designer Studio.

On performance front, the company has posted an average EPS of Rs. 1.61 for past three fiscals on existing equity. In particular the EPS for fiscal 2011-12 stands at Rs. 1.29. Its NAV as on 31.03.12 is Rs. 28.53 post 1 for 2 bonus in March 2012. Thanks to placement at a price of Rs. 20 in 2005 and 2006 and at Rs. 300 in August 2010 and at par soon thereafter and at a price of Rs. 500 per share in March 2012 before bonus issue. Thus the NAV is on account of these premiums, but based on performance, the asking price is at a very high P/E of 27 plus on fully diluted equity.  On lead manager's front, this is the first IPO mandate and hence no track record of past mandate performances.