Review By on May 11, 2017
Bhakti Gems and Jewellery Ltd (BGJ) is the manufacturer, wholesaler and supplier of gold jewellery and has its headquartered at Ahmedabad, Gujarat. Company mainly focuses on traditional Indian jewellery. Its products include handmade gold jewellery studded with precious and semi precious stones such as diamond, ruby, cubic zirconia (cz) etc. The jewelleries are designed by it and manufactured on job work basis at Ahmedabad, Rajkot and Mumbai. BGJ is a customer-centric Company; with a prime focus on attain the utmost client satisfaction by offering them quality assured products.
To part finance its working capital fund needs, the company is coming out with a maiden IPO of 1962000 equity share of Rs. 10 each at a fixed price of Rs. 20 per share to mobilize Rs. 3.92 crore. Issue opens for subscription on 17.05.17 and will close on 22.05.17. Minimum application is to be made for 6000 shares and in multiples thereof, thereafter. Post allotment, shares will be listed on BSE SME. Issue is lead managed solely by Guiness Corporate Advisors Pvt Ltd and Skyline Financial Services Pvt Ltd is the registrar to the issue. After initial MoA equity subscription at par, it issued equity in the price range of Rs. 40 to Rs. 50 per share from April 2010 to March 2017 and has also issued bonus shares in the ratio of 3 for 1 in February 2017. Post issue its current paid up equity capital of Rs. 4.85 crore will stand enhanced to Rs. 6.81 crore.
On performance front, while for the previous four fiscals it has shown continuous rise in top line, but bottom line marked inconsistency. Its turnover/net profits were Rs. 9.12 cr. / Rs. 0.003 cr. (FY13), Rs. 11.22 cr. / Rs. 0.001 cr (FY14), Rs. 18.41 cr. / Rs. 0.01 cr. (FY15) and Rs. 19.30 cr. / Rs. 0.01 cr. (FY16). For the first 11 months of the current fiscal it has posted net profit of Rs. 0.49 cr. on a turnover of Rs. 20.63 cr. Thus it has marked sudden jump in the bottom line for this fiscal. If we annualize the latest earnings and attribute to the fully diluted equity post issue, then asking price is at a P/E of around 25 plus and at a P/BV of 1.48. Thus issue is fully priced. It has no listed peers to compare with.
On merchant banker’s front, this is 29th mandate so far and in last 10 issues listed recently, two issues opened at a discount to offer price.
Conclusion: As the issue is fully priced, risk savvy cash surplus investors may consider investment for long term.
Review By on May 11, 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 Bhakti Gems & Jewellery Ltd. offers an early investment opportunity in Bhakti Gems & Jewellery Ltd.. A stock market investor can buy Bhakti Gems IPO shares by applying in IPO before Bhakti Gems & Jewellery Ltd. shares get listed at the stock exchanges. An investor could invest in Bhakti Gems IPO for short term listing gain or a long term.
Read the Bhakti Gems IPO recommendations by the leading analyst and leading stock brokers.
Bhakti Gems IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Bhakti Gems IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Bhakti Gems IPO?"
Our recommendation for Bhakti Gems 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 Bhakti Gems IPO.
The Bhakti Gems IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Bhakti Gems IPO allotment status to check.
