Review By on May 19, 2014
Dhanuka Commercial is a Non Deposit taking Non-systemically Important Non Banking Finance Company (NBFC-ND-NSI) engaged primarily in the business of advancing loans and investing/trading in securities. It has been running on a modest operating scale till 2012 – 2013. To augment its capital base and meet need of corpus funds for its activities, the company is coming out with a maiden IPO for 4440000 equity share of Rs. 10 each at par to mobilize Rs. 4.44 crore. Issue opens for subscription on 22.05.14 and will close on 28.05.14. Minimum application is to be made for 10000 shares and in multiples thereof, thereafter. Issue is lead managed by Aryaman Financial Services Ltd and MAS Services Ltd is the registrar to the issue. During March 2001 to March 2007 the company issued equity shares at a price between Rs. 30 and Rs. 100 per share and then in January 2014 issued bonus shares worth Rs. 10.52 crore utilizing share premium of Rs. 12.70 crore standing to its credit by then. Thus its equity of Rs. 1.78 crore as at 31.12.2013 enhanced to Rs. 12.30 crore. Post this issue it will further rise to Rs. 16.74 crore.
The company has posted a net profit of Rs. 0.31 crore for the nine months period ended December 31, 2013 and Rs. 0.09 crore for the year ended March 31, 2013 on the revenue of Rs. 1.03 crore and Rs. 1.24 crore respectively. Thus if one attribute the latest earnings on its enhanced equity then the EPS stands at mere Rs. 0.01 and thus asking price at par is also at a P/E of 1000 and thus it is not worth on this parameter at least. It is operating in high risk/low yield segment and in highly competitive area.
The merchant banker has poor track record.
Avoid this at par issue as it has entry barrier as well as high P/E.
Review By on May 19, 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 Dhanuka Commercial Ltd. offers an early investment opportunity in Dhanuka Commercial Ltd.. A stock market investor can buy Dhanuka Commercial IPO shares by applying in IPO before Dhanuka Commercial Ltd. shares get listed at the stock exchanges. An investor could invest in Dhanuka Commercial IPO for short term listing gain or a long term.
Read the Dhanuka Commercial IPO recommendations by the leading analyst and leading stock brokers.
Dhanuka Commercial IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Dhanuka Commercial IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Dhanuka Commercial IPO?"
Our recommendation for Dhanuka Commercial IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Dhanuka Commercial IPO.
The Dhanuka Commercial IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Dhanuka Commercial IPO allotment status to check.
