Review By on August 30, 2017
Dhruv Wellness Ltd. (DWL) is in the business of whole selling and distributorship of general, pharmaceutical and cosmetic products. It also functions as a stockiest of medical, general cosmetics and pharmaceutical products. On January 1, 2016, it acquired the business, all the assets including debts, stock, stock-in-trade, movable plant and machinery, trade-marks, designs, patents and licenses and all credits etc. of Dhruv Agency which was in a market for about a decade and had been promoted by it.
To part finance its working capital and general corporate funds needs, DWL is coming out with a maiden IPO of 2784000 equity shares of face value of Rs. 10 each at a fixed price of Rs. 20 per equity share to mobilize Rs. 5.57 crore. Issue opens for subscription on 31.08.17 and will close on 04.09.17. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Gretex Corporate Services Pvt. Ltd and Purva Sharegistry (India) Pvt. Ltd. is the registrar to the issue. The issue will constitute 26.41% of the post issue paid up equity share capital of the company. Having issued initial equity at par it raised further equity in a price range of Rs. 55 to Rs. 60 per share from March 2016 to June 2017 and also issued bonus shares in the ratio of 4 for 1 on 28.06.17. Post issue, its current paid up equity capital of Rs. 7.76 crore will stand enhanced to Rs. 10.54 crore.
On performance front, for last two fiscals DWL has posted turnover/net profits of Rs. 22.72 cr. / Rs. 0.20 cr. (FY16), Rs. 101.94 cr. / Rs. 0.40 cr. (FY17). If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 52 plus and at a P/BV of 1.65. It has posted an average EPS of Rs. 0.48 and Ronw of 5.61% for last two fiscals. Thus issue is highly priced and performance parameters are not supportive to asking price. As claimed by the management, it has no listed peers to compare with.
On merchant banker's front, this is the 5th mandate from its stable and our of last four listings two issues opened at discount, one at par and one with mere premium.
Conclusion: Considering track record and aggressive pricing, there is no harm in giving this IPO a miss.
Review By on August 30, 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 Dhruv Wellness Ltd. offers an early investment opportunity in Dhruv Wellness Ltd.. A stock market investor can buy Dhruv Wellness IPO shares by applying in IPO before Dhruv Wellness Ltd. shares get listed at the stock exchanges. An investor could invest in Dhruv Wellness IPO for short term listing gain or a long term.
Read the Dhruv Wellness IPO recommendations by the leading analyst and leading stock brokers.
Dhruv Wellness IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Dhruv Wellness IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Dhruv Wellness IPO?"
Our recommendation for Dhruv Wellness IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Dhruv Wellness IPO.
The Dhruv Wellness IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Dhruv Wellness IPO allotment status to check.
