Review By on September 13, 2016
AVSL Industries Ltd (AVSL) is a Delhi based manufacturing and trading organization having its manufacturing plant of producing raw material for Power Cable at Narela, Delhi and Halol, Gujarat and also has office at Netaji Subhash Place, Delhi for trading. AVSL commenced its operations of manufacturing of PVC products in the year 2009 from its Narela, Delhi plant. In both plants it is manufacturing PVC Compound, HDPE/LDPE Compound, PVC Filler, and HDPE/LDPE Tape etc. These products are raw material for HT/ LT Power Cables, Telecom Cables and PVC Pipes and Fittings. Apart from this, it has also started Export and Import of Agro based commodities such as Rice, Wheat Flour, Pulses, Spices, Food Grains and Dry Fruits in the year 2015.
To part finance its working capital requirements and general corpus fund needs, the company is coming out with a maiden IPO of 1440000 equity share of Rs. 10 each at a fixed price of Rs. 36 per share to mobilize Rs.5.18 crore. Issue opens for subscription on 15.09.16 and will close on 28.09.16. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSESME Emerge platform. After incorporation equity at par, it issued further equity at a price ranging from Rs. 36 per share to Rs. 1500 per share during 2005 to 2016. It has also issued bonus n the ratio of 9 equity shares against 1 equity share held. Post issue its current paid up equity capital of Rs. 3.89 crore will stand enhanced to Rs.5.33 crore.
On performance front, it has posted an average EPS of Rs. 0.35 for last three fiscals. Its turnover/net profits were Rs. 18.99 cr./ Rs. 0.06 cr. (FY13), Rs.13.43 cr. / Rs. 0.07 cr. (FY14) and Rs. 14.22 cr / Rs. 0.03 cr. (FY15). For FY 16 it has earned net profit of Rs. 0.20 crore on a turnover of Rs. 68.60 crore and this sudden jump is really surprising. If we attribute the latest earnings on fully diluted equity post IPO then asking price is at a P/E of 94 plus and at a P/BV of 2.29 making it a pricy bet.
On merchant banker’s front, this is the 21st IPO from its stable and earlier mandates have shown mixed trends post listing.
Considering exorbitant pricing, one may give it a miss.
Review By on September 13, 2016
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 AVSL Industries Ltd. offers an early investment opportunity in AVSL Industries Ltd.. A stock market investor can buy AVSL Industries IPO shares by applying in IPO before AVSL Industries Ltd. shares get listed at the stock exchanges. An investor could invest in AVSL Industries IPO for short term listing gain or a long term.
Read the AVSL Industries IPO recommendations by the leading analyst and leading stock brokers.
AVSL Industries IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the AVSL Industries IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is AVSL Industries IPO?"
Our recommendation for AVSL Industries IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the AVSL Industries IPO.
The AVSL Industries IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit AVSL Industries IPO allotment status to check.
