Review By on July 21, 2014
Carewell Industries Limited (CIL)-(formerly known as PL Chemicals Private Limited) is engaged in marketing of “Rooster” brand mosquito repellent coils and the brand name “ROOSTER” is owned by its wholly owned subsidiary, CKM Homecare Solutions Private Limited. It is also engaged in the marketing of incense sticks (agarbattis) in the brand name “Deo” and “Samraj”.
CIL gets products manufactured from third party manufacturers under its own brand and market it through the network of dealers and distributors. Currently, its products are sold in South India. To meet its working capital requirements and brand building exercise, the company is coming out with its maiden IPO of 3304000 equity share of Rs. 10 each at a fixed price of Rs. 15 per share to raise Rs. 4.96 crore. The issue opens for subscription on 25.07.14 and will close on 30.07.14. Minimum application is to be made for 8000 shares and in multiples thereof, thereafter. Issue is lead managed by Inventure Merchant Banker Services Pvt Ltd. And Purva Sharegistry (India) Pvt Ltd. Post issue shares will be listed on BSE SME.
Till fiscal 2011-12, the company has been incurring losses and for the fiscal 2012-13, it posted an EPS of Rs. 0.01. Thanks to the preferential issue of equity shares to promoters at a price of Rs. 35 (219330 shares) on 10.03.12 and Rs. 15 (400000 sharees) on 11.03.14 that lifted the NAV to Rs. 12.12 as on 28.02.14. For 11 months period ended on the said date the company posted a turnover of Rs. 0.88 crore with a net profit of Rs. 0.05 crore. If we attribute this earning on expanded equity of Rs. 7.10 crore post this issue, the EPS comes to below Rs. 0.01 and based on this the asking price is at a P/E of 1500 plus.
Lead manager has poor track record for its earlier nine mandates of SME IPOs.
Remark: Avoid this costly bet that also has entry barriers.
Review By on July 21, 2014
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 Carewell Industries Ltd. offers an early investment opportunity in Carewell Industries Ltd.. A stock market investor can buy Carewell Industries IPO shares by applying in IPO before Carewell Industries Ltd. shares get listed at the stock exchanges. An investor could invest in Carewell Industries IPO for short term listing gain or a long term.
Read the Carewell Industries IPO recommendations by the leading analyst and leading stock brokers.
Carewell Industries IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Carewell Industries IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Carewell Industries IPO?"
Our recommendation for Carewell Industries IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Carewell Industries IPO.
The Carewell Industries IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Carewell Industries IPO allotment status to check.
