Review By on March 21, 2017
Creative Peripherals & Distribution Ltd (CPDL) is is engaged in providing distribution services of both volume business and value business products. It has partnered with a number of renowned brands for distribution in the country such as Rapoo Technologies Limited, Lino Manfrotto + Co S.p.a, Transcend Information Inc, ViewSonic International Corporation, Olympus Corporation, Belkin Inc, Zioncom (Hong Kong) Technology Limited, Apple India Private Limited, Sennheiser Electronics India Private Limited, Gopro Cooperatief U.A, TPV Technology India Private Limited, Printronix, SIEPL India Electronics Private Limited, Vintron Infronatics Limited and Samsung India Electronics Private Limited specialising in IT, Lifestyle, Imaging and telecom products. CPDL is a broad based distribution model which is based on multiple products and multiple brand strategy. The focus is to capture a considerable market share in each of the product categories that will help in its offerings to channel partners and also spread its market risks arising out of fluctuations in the market share of various brands besides helping it to achieve economies of scale.
To part finance its working capital and general corpus fund needs, the company is coming out with a maiden IPO of 1800000 equity share of Rs. 10 each via book building route with a price band of Rs. 71-75 to mobilize Rs. 12.78 to Rs. 13.50 crore (based on lower and upper price bands). Issue opens for subscription on 29.03.17 and will close on 03.04.17. Minimum application is to be made for 1600 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. From inception till March 2016 it issued all equity at par and then a bonus in the ratio of 1 for 1 in January 2017. Post issue it’s paid up equity capital will stand enhanced from Rs. 4.00 crore to Rs. 5.80 crore.
On performance front, the company has posted turnover/net profits of Rs. 126.61 cr. / Rs. 0.90cr. (FY13), Rs. 140.15 cr. /Rs. 1.59 cr. (FY14), Rs. 184.62 cr. /Rs. 0.76 cr. (FY15) and Rs. 198.79 cr. / Rs. 0.67 cr. (FY16). For first half of the current fiscal it has earned net profit of Rs. 0.46 cr. on a turnover of Rs. 91.02 cr. If we annualize latest earnings and attribute it to fully diluted equity post issue then asking price is at a P/E of around 46 plus and P/BV of 5 plus. Thus it is aggressively priced against peers trading at around 23 P/E as per prospectus details.
On merchant banker’s front, this is the 41st mandate from its stable and past mandates have shown mixed trends. However, last 10 issues have shown positive trends on listing dates.
Conclusion: Although top line shows growth, bottom line has declining trends. Issue is priced very aggressively, there is no harm giving it a miss.
Review By on March 21, 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 Creative Peripherals & Distribution Ltd. offers an early investment opportunity in Creative Peripherals & Distribution Ltd.. A stock market investor can buy Creative Peripherals IPO shares by applying in IPO before Creative Peripherals & Distribution Ltd. shares get listed at the stock exchanges. An investor could invest in Creative Peripherals IPO for short term listing gain or a long term.
Read the Creative Peripherals IPO recommendations by the leading analyst and leading stock brokers.
Creative Peripherals IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Creative Peripherals IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Creative Peripherals IPO?"
Our recommendation for Creative Peripherals IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Creative Peripherals IPO.
The Creative Peripherals IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Creative Peripherals IPO allotment status to check.
