Review By on July 18, 2017
Captain Technocast Ltd (CTL) is engaged in manufacturing of metal castings with high tensile, high-volume, complex thin wall investment castings and fully finished casting based sub-assemblies and components. CTL has variety of castings such as includes automotive castings, defense castings, industrial valves castings, turbine blade castings etc. This is the third group company going public with SME IPO. Earlier other two group companies Captain Polyplast Ltd [Nov 2013 offered at Rs. 30 - listed at Rs. 33-last trade Rs. 171 (17.07.17)] and Captain Pipes Ltd [Nov 2014 offered at Rs. 40 - opened at Rs. 41.90 – last trade at Rs. 97 (17.07.17)] went public with SME IPOs.
To part finance its working capital and general corpus fund needs, the company is coming out with a maiden IPO of 1425000 equity share of Rs. 10 each at a fixed price of Rs.40 per share to mobilize Rs. 5.70 crore. Issue consists of fresh equity issue of 825000 equity shares and offer for sale of 600000 equity shares. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Issue opens for subscription on 20.07.17 and will close on 24.07.17. Post allotment, shares will be listed on BSE SME. Entire equity of the company is issued at par. Post issue, its current paid up equity capital of Rs. 4.28 crore will stand enhanced to Rs. 5.11 crore. Issue is solely lead managed by Hem Securities Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. The issue constitutes 27.91% of the post issue paid up capital of the company.
On performance front, the company that incurred loss for FY turned the corner and since FY14 onwards, doing profitable business. However, its top line remained static for FY 15 and 16 and marked sudden jump in FY17. It has posted total turnover/net profits of Rs. 4.25 cr. / Rs. –(0.27) cr. (FY13), Rs. 8.42 cr. / Rs. 0.18 cr. (FY14), Rs. 10.87 cr. / Rs. 0.10 cr. (FY15), Rs. 10.95 cr. / Rs. 0.26 cr. (FY16) and Rs. 16.68 cr. / Rs. 1.32 cr. (FY17). If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 15 plus against industry composite P/E of 17.72. Last three fiscals average RoNW is 16.12%. Offer is at a P/BV of 2.88. Thus issue appears to have been fully priced.
On merchant banker’s front, this is 35th mandate from its stable so far and out of last 10 listings, one IPO gave negative return, two IPOs opens just above offer price and the rest opened at a good premium to offer price.
Conclusion: Based on performance and other parameters, issue appears fully priced. However, other two group company’s listing performance and the latest faring; investors may consider investment for short to long term.
Review By on July 18, 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 Captain Technocast Ltd. offers an early investment opportunity in Captain Technocast Ltd.. A stock market investor can buy Captain Technocast IPO shares by applying in IPO before Captain Technocast Ltd. shares get listed at the stock exchanges. An investor could invest in Captain Technocast IPO for short term listing gain or a long term.
Read the Captain Technocast IPO recommendations by the leading analyst and leading stock brokers.
Captain Technocast IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Captain Technocast IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Captain Technocast IPO?"
Our recommendation for Captain Technocast IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Captain Technocast IPO.
The Captain Technocast IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Captain Technocast IPO allotment status to check.
