Review By Dilip Davda on March 28, 2017
ASL Industries Ltd (ASL) is engaged in the business of manufacturing of forged products and press shop for sheet metal products. Its products have varied applications and are used in various industries like railway, defense, and automobile. ASL provides one stop solution from metal forming to assembly under one roof along with logistics and just-in-time solutions. The company is capable of manufacturing both standardized as well as customized products. Its flexible manufacturing infrastructure enables us to extend product range and change product mix as per customer demand and requirement.
To part finance its working capital and corpus fund needs, the company is coming out with a maiden IPO of 28,00,000 equity share of Rs. 10 each at a fixed price of Rs. 35 per share to mobilize Rs. 9.80 crore. Issue opens for subscription on 31.03.17 and will close on 07.04.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Guiness Corporate Advisors Pvt Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. From inception till 1999 and in 2004 as well as in 2010 it issued few shares at par. It raised further equity in the price range of Rs. 16 to Rs. 50 per share (Rs. 10 FV) during 2002-2015. Its current paid up equity capital of Rs. 7.62 crore will stand enhanced to Rs. 10.42 crore post issue.
On performance front, the company has posted turnover/net profits of Rs. Rs. 40.68 cr. / Rs. (-0.67) cr. (FY13), Rs. 31.38 cr. / Rs. (-0.78) cr. (FY14), Rs. 44.98 cr. / Rs. (-0.002) cr. (FY15) and Rs. 56.08 cr. / Rs. 0.44 cr. (FY16). For first half of the current fiscal it has earned net profit of Rs. 0.13 cr. on a turnover of Rs. 28.32 cr. If we annualize latest earnings and attribute it to fully diluted equity post issue, then asking price is at a P/E of 140 against industry average of 42 plus making it a costly offer. It has still carried forward losses. Because of issue at premium its offer is around 1.2 P/BV but that does not matter.
On merchant banker’s front, this is the 16th mandate from its stable in last three years and as per prospectus details last 10 IPOs (excluding Sarthak) has shown mixed trends.
Conclusion: Being expensive offer and non-encouraging performance so far, one may give it a miss.
Review By Dilip Davda on March 28, 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 ASL Industries Ltd. offers an early investment opportunity in ASL Industries Ltd.. A stock market investor can buy ASL Industries IPO shares by applying in IPO before ASL Industries Ltd. shares get listed at the stock exchanges. An investor could invest in ASL Industries IPO for short term listing gain or a long term.
Read the ASL Industries IPO recommendations by the leading analyst and leading stock brokers.
ASL Industries IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the ASL Industries IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is ASL Industries IPO?"
Our recommendation for ASL Industries IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the ASL Industries IPO.
The ASL Industries IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit ASL Industries IPO allotment status to check.
