Review By on August 1, 2017
Ashok Masala Mart Ltd (AMML) is engaged into manufacturing and supplying of blended spices, whole spices and grinded spices. It has been supplying the traditional and delectable range of spices under two brands 'APPU MASALA' & 'GAYATRI MASALA' with more than 30 types of Spices and Masalas including instant mix range such as Pav Bhaji Masala, Chaat Masala, Tea Masala, Garam Masala, Sambhar Masala,
Punjabi Chole Masala, Biryani / Pulav Masala, Kitchen King Masala and various Powders like Red Chilli Powder, Jeera Powder, White Pepper Powder, Turmeric Powder.
To part finance its fund needs for purchase of corporate office and doing interiors, working capital and general corpus funds, the company is coming out with a maiden IPO of 2010000 equity share of Rs. 10 each at par to mobilize Rs. 2.01 crore. Issue opens for subscription on 07.08.17 and will close on 11.08.17. Minimum application is to be made for 10000 shares and in multiples thereon, thereafter. Issue is solely lead managed by Navigant Corporate Advisors Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE SME. The issue constitutes 38.95% of the post issue paid up capital of the company. While most of the equity shares are issued at par, it issued few shares in a price range of Rs. 15 to Rs. 30 during May 2014 to September 2016. It issued 6.5 lakh shares at par from April 2017 to June 2017. Post issue its current paid up equity capital of Rs. 3.15 crore will stand enhanced to Rs. 5.16 crore.
On performance front, for last three fiscals AMML has posted turnover/net profits of Rs. 3.78 cr. / Rs. 0.03 cr. (FY15), Rs. 2.88 cr. / Rs. 0.03 cr. (FY16) and Rs. 8.39 cr. / Rs. 0.12 cr. (FY17). Sudden jump in top and bottom line for FY17 is surprising. Last three year’s average EPS is Rs. 0.50 and for FY it stands at Rs. 0.59 (on Rs. 2.50 crore paid up equity capital). If we attribute latest earnings on fully diluted post issue equity then asking price is at a P/E of 43 plus and at a P/BV of 0.77. Last three year’s average RoNW is 2.92. As per prospectus, company has no listed peer to compare with. Issue is at par and company is doing profitable business that may create attraction among investors.
On merchant banker’s front, this is the sixth mandate from its stable. Out of 5 issues listed so far, two opened on a positive note, one around offer price and the rest opened at a discount to offer price on the day of listing. Thus it has mixed trends.
Conclusion: Risk savvy cash surplus investors may consider long term investment in this at par issue.
Review By on August 1, 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 Ashok Masala Mart Ltd. offers an early investment opportunity in Ashok Masala Mart Ltd.. A stock market investor can buy Ashok Masala Mart IPO shares by applying in IPO before Ashok Masala Mart Ltd. shares get listed at the stock exchanges. An investor could invest in Ashok Masala Mart IPO for short term listing gain or a long term.
Read the Ashok Masala Mart IPO recommendations by the leading analyst and leading stock brokers.
Ashok Masala Mart IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Ashok Masala Mart IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Ashok Masala Mart IPO?"
Our recommendation for Ashok Masala Mart 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 Ashok Masala Mart IPO.
The Ashok Masala Mart IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Ashok Masala Mart IPO allotment status to check.
