Review By on January 10, 2014
The beginning of the CY 2014 for primary market is also marked by BSE SME IPO. Chemtech Industrial Valves Ltd is coming out with an issue of Rs. 7.43 crore. Details of the same are as under:
Chemtech Industrial Valves Ltd. (CIVL) is engaged in the business of manufacturing carbon steel and stainless steel industrial valves of various types & sizes ranging from 15mm up to 4000mm. It manufactures and supplies various types of ball, butterfly, globe, gate and check valves and has a significant customer base in the steel industry. CIVL also supplies its products to customers in the oil and gas (including petro-chemical) industry, infrastructure (including pipelines), process industries (including pharmaceuticals, chemicals, intermediaries and fertilizers), nuclear space and defense industry.
CIVL has planned to acquire additional plant and machinery for its existing facility at Vadvali and funding interiors of corporate office along with raising corpus fund to the tune of Rs. 8.47 crore. To part finance this projects, the company is offering 4952000 equity share of Rs. 10 each at a fixed price of Rs. 15 per share to mobilize Rs. 7.43 crore. The issue opens for subscription on 15.01.14 and closes on 17001.14. Minimum application is to be made for 8000 shares and in multiples thereof, thereafter. The issue is lead managed by Choice Capital Advisors Pvt. Ltd. and Bigshare Services India Pvt. Ltd. is the registrar to the issue. Post allotment, shares will be listed on BSE SME. In March 2013 it issued 50000 shares at a price of Rs. 200 per share and then issued bonus shares in the ratio of 6 for 1 in June 2013 and also made preferential issue of equity at a price of Rs. 15 per share. This enhanced the equity to Rs. 6.51 crore that will rise to Rs. 11.47 crore post issue.
On performance front, the company posted an average EPS of Rs. 1.69 .for last three fiscals and for first seven months ended 30.11.13 of the current fiscal it posted net profit of Rs. 0.07 crore on a turnover of Rs. 25.75 crore. If we attribute this earning on annualized basis on fully diluted equity post issue then EPS stands at Rs. 0.10 and thus asking price is at a P/E of 150.
This is the first mandate of the merchant banker with no track record.
AVOID
Review By on January 10, 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 Chemtech Industrial Valves Ltd. offers an early investment opportunity in Chemtech Industrial Valves Ltd.. A stock market investor can buy Chemtech Industrial Valves IPO shares by applying in IPO before Chemtech Industrial Valves Ltd. shares get listed at the stock exchanges. An investor could invest in Chemtech Industrial Valves IPO for short term listing gain or a long term.
Read the Chemtech Industrial Valves IPO recommendations by the leading analyst and leading stock brokers.
Chemtech Industrial Valves IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Chemtech Industrial Valves IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Chemtech Industrial Valves IPO?"
Our recommendation for Chemtech Industrial Valves IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Chemtech Industrial Valves IPO.
The Chemtech Industrial Valves IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Chemtech Industrial Valves IPO allotment status to check.
