Review By on September 28, 2016
Dhanuka Realty Ltd (DRL) is a real estate development and construction company primarily focusing on development of residential apartments in Jaipur. It has been successful in completing its first residential project, “Sunshine Orchid” comprising of 16 residential flats of 2 BHK with total sq. ft built up area of 20253.18 Sq Ft in the year 2010. The company also undertakes construction contracts from its Group Companies for development of residential projects. As on the date of prospectus, DRL has successfully completed construction of two residential projects namely Sunshine Shalimar and Sunshine Krishna 3, and currently have two ongoing projects. Presently, DRL subcontracts all construction and execution work to third party contractors. As and when it receives a contract, it initiates the process of finalizing the subcontractor for execution of the same. DRL carry overall supervision of construction work on the site including quality control, site management, work scheduling, bar charting, construction time lining etc. and overall progress of work is managed and supervised by DRL. The Company has a Subsidiary Company namely Triveni Kripa Buildhome Private Limited, which has recently been acquired by it from promoters with a view to expand our business.
To meet working capital and general corpus funds requirement, the company is coming out with a maiden IPO of 1056000 equity share of Rs. 10 each at a fixed price of Rs. 40 per share to mobilize Rs. 4.22 crore. Issue opens for subscription on 30.09.16 and will close on 06.10.16. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Issue is lead managed by Hem Securities Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on NSE SME Emerge platform. Having raised equity at par on MoA subscription, it issued further equity at a price of Rs. 150 per share in December 20008 and then issued bonus in the ratio of 19 for 1 in May 2016. It further raised equity at a price of Rs. 16.18 in July 2016. Post issue, its current paid up equity capital of Rs. 2.46 crore will stand enhanced to Rs. 3.52 crore.
On performance front, the company has posted turnover/net profit of Rs. 1.70 cr. / Rs. 0.04 cr. (FY13), Rs. 7.60 cr. / Rs. 0.10 cr. (FY14), Rs. 13.46 cr. / Rs. 0.19 cr. (FY15) and 17.31 cr. / Rs. 0.57 cr. (FY16). Thus it has shown steady progress in top and bottom lines. If we attribute latest earnings on fully diluted equity post IPO then asking price is at a P/E of 24 plus against industry composite of 25 thus issue appears to be fully priced.
On merchant banker’s front, this is 21st mandate from its stable and past mandates have shown mixed trends.
Conclusion: As the issue is fully priced, long term investors with surplus funds may consider investment, other may ignore.
Review By on September 28, 2016
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 Dhanuka Realty Ltd. offers an early investment opportunity in Dhanuka Realty Ltd.. A stock market investor can buy Dhanuka Realty IPO shares by applying in IPO before Dhanuka Realty Ltd. shares get listed at the stock exchanges. An investor could invest in Dhanuka Realty IPO for short term listing gain or a long term.
Read the Dhanuka Realty IPO recommendations by the leading analyst and leading stock brokers.
Dhanuka Realty IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Dhanuka Realty IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Dhanuka Realty IPO?"
Our recommendation for Dhanuka Realty IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Dhanuka Realty IPO.
The Dhanuka Realty IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Dhanuka Realty IPO allotment status to check.
