Review By on June 20, 2017
Bansal Multiflex Ltd (BML) is engaged in trading of cloth, different type of semi furnished fabrics, varieties of finished fabrics. It is also engaged in trading of different type of chemicals primarily used in making detergent and soaps. BML also engages services of third party job workers for processing of grey cloth which includes dying, bleaching, printing, drying etc. The company sells the semi-finished and finished product to garment houses for manufacturing of garments in the apparel industry. BML’s Product portfolio comprises of Grey fabric, Cotton Fabric, Dress materials, Matching Twill Fabrics, Satin fabrics, Slub Satin Fabrics, Cotton Slub fabrics, Dobby fabrics, Meti fabrics, Jute Fabrics, Denim Fabric, Xford Fabrics, Rencho Fabrics, Micro Cotton Fabrics and Raymond Cotton Fabrics under the spectrum of fabric and cloth and Acid Slury (LABSA),AOS Chemicals, Caustic Flakes, Caustic Soda Flakes under the spectrum of chemicals.
To part finance its working capital and general corporate funds need, the company is coming out with a maiden IPO of 2000000 equity share of Rs. 10 each with a fixed price of Rs. 31 per share to mobilize Rs.6.20 crore. Issue opens for subscription on 30.06.17 and will close on 04.07.17. 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 Pantomath Capital Advisors Pvt Ltd. and Bigshare Services Pvt Ltd is the registrar to the issue. Company’s entire equity is issued at par. Post IPO its current paid up equity capital of Rs. 5.41 crore will stand enhanced to Rs. 7.41 crore.
On performance front, for last three fiscals it has posted turnover/net profits of Rs. 1.40 cr. / Rs. 0.001 cr. (FY14), Rs. 1.77 cr. / Rs. 0.01 cr. (FY15) and Rs. 2.13 cr. / Rs. 0.02 cr. (FY16). For nine months ended on 31.12.16 of the current fiscal, it has posted net profit of Rs. 0.38 crore on a turnover of Rs. 11.77 cr. If we annualize the latest earnings and attribute it on fully diluted equity post IPO, then asking price is at a P/E of around 44 plus making this issue a costly bet. Its average RoNW for last three fiscals is 25.86%. According to offer documents, the company has no listed peers to compare with. Performance does not justify the pricing of the issue.
On merchant banker’s front, this is the 39th mandate from its stable in last three years that have shown mixed trends with average returns in most of the cases. Out of last 10 issues one has closed at par and the rest have closed with some premium to offer prices on listing date.
Conclusion: Only risk savvy cash surplus investors may consider moderate investment for long term in this costly bet.
Review By on June 20, 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 Bansal Multiflex Ltd. offers an early investment opportunity in Bansal Multiflex Ltd.. A stock market investor can buy Bansal Multiflex IPO shares by applying in IPO before Bansal Multiflex Ltd. shares get listed at the stock exchanges. An investor could invest in Bansal Multiflex IPO for short term listing gain or a long term.
Read the Bansal Multiflex IPO recommendations by the leading analyst and leading stock brokers.
Bansal Multiflex IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Bansal Multiflex IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Bansal Multiflex IPO?"
Our recommendation for Bansal Multiflex 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 Bansal Multiflex IPO.
The Bansal Multiflex IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Bansal Multiflex IPO allotment status to check.
