Review By on December 23, 2012
While we have listings of three mini mega to mega IPOs that entered in the second week of December 2012 this week, one more BSE SME IPO is trying to bid adieu and take a tally to a dozen SME IPOs for the calendar year 2012.
As most of the SME IPOs have given some listing gains, mainly due to market making efforts and thus big ticket investors interest has been taken care of, this IPO too may find some takers.
This time we have an IPO from Eco Friendly Food Processing Park Ltd. (EFFPP) that is planning development of farm land for organic farming, construction of storage sheds, solar fencing and brand building. To part finance this along with raising other general corpus funds the company is offering 3006000 equity share of Rs. 10 each with a fixed priced of Rs. 25 per share (i.e. with a premium of Rs. 15 per share. Issue opens for subscription on 27.12.12 and will close on 31.12.12. Minimum application is to be made for 6000 shares and in multiples thereof thereafter. The net issue constitutes 25.30% of the post issue paid up capital of the company. Issue is lead managed by Guiness Merchant Bankers Pvt. Ltd. and Cameo Corporate Services Ltd. acts as registrar to the issue.
EFFPP has to its pride in using a delicate balance between the latest technology in production processes and material usages available; and practical know how. The company has a committed team that spends 80% of its time on the road throughout Northern India to ensure a high level of customer satisfaction, as well as visiting those expressing interest in our products. The team consists of fully trained experienced people who have been around the product range since each piece began. It is due to this close contact with the customers that ECO FRIENDLY has such a high success level in all improvements to designs, as well as releases of new innovations. ECO FRIENDLY's continuous research and development focus assures a maximum economic benefit to each individual owner.
On company's performance front, it has posted an average Rs. 3.13 EPS for last three fiscals.
As far as lead manager is concerned, it had a mandate for RCL Retail SME IPO that has given mini listing gain and is currently quoting at discount. NAV as on 30.09.12 is at Rs. 14.96. For first half of current fiscal its top and bottom line remains static. It has issued bonus shares in the ratio of 3 shares for every 1 share held in September 2012 post issuing fresh 2.5 lakh equity shares at a price of Rs. 25 per share twice in March and June 2012. Post issue the equity will rise to Rs. 9.89 crore and it we attribute current earnings on this, EPS stands at Rs. 2 that translates offer price at a P/E of 12.5 which is very high.
As this group's another company Esteem Bio Organic Food Processing Ltd is also planning BSE SME Platform IPO going forward, a market operation on this counter is not ruled out post listing. Retail investors should give it a miss. Risk avers HNIs can dare to park moderate fund.
Review By on December 23, 2012
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 Eco Friendly Food Processing Park Ltd. offers an early investment opportunity in Eco Friendly Food Processing Park Ltd.. A stock market investor can buy Eco Friendly Food Processing IPO shares by applying in IPO before Eco Friendly Food Processing Park Ltd. shares get listed at the stock exchanges. An investor could invest in Eco Friendly Food Processing IPO for short term listing gain or a long term.
Read the Eco Friendly Food Processing IPO recommendations by the leading analyst and leading stock brokers.
Eco Friendly Food Processing IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Eco Friendly Food Processing IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Eco Friendly Food Processing IPO?"
Our recommendation for Eco Friendly Food Processing IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Eco Friendly Food Processing IPO.
The Eco Friendly Food Processing IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Eco Friendly Food Processing IPO allotment status to check.
