Review By on January 15, 2013
We have been waiting for main line IPO to break the ice for the year 2013 for the primary market, but, time and again, it is the BSE SME platform IPO of Esteem Bio Organic Food Processing Ltd., a group company of Eco Friendly Food Processing Park Ltd. that went public and just got listed with dull movement.
Esteem Bio Organic Food (EBOF) is engaged in manufacturing of wheat, rice, pulses and vegetables. It operates one of the largest agriculture unit in India, at Pantnagar(Kichha), Udham Singh Nagar in Uttaranchal, a state in northern India. The company mulls Setting up of shade net cultivation facility, development of farm land for organic farming, procurement of farm tools and equipments and raising general corpus fund. To part finance these, the company is coming out with an issue of 4500000 equity share of Rs. 10 each at a fixed price of Rs. 25 per share. The issue is opening on 18.01.2013 and will close on 22.01.2013. Minimum application is to be made for 6000 shares and in multiples thereof, thereafter. The issue is lead managed by Guiness Merchant Bankers Pvt Ltd. and Cameo Corporate Services Ltd is the registrar to the issue. The shares will be listed on BSE SME.
On merchant banker's performance front, it had the mandate for Eco Friendly Food IPO of the same group that go listed on last Monday and has performed poorly despite market making attached to it. ON the front of company's performance, for last three fiscals it has posted an average EPS of Rs. 3.14 and for the first half of current fiscal it stands at Rs. 1.14 on an equity base of Rs. 10.40 crore that will stand enhanced to Rs. 14.90 crore posts this IPO. If we attribute the earnings on enhanced equity than the asking price is at a P/E of 15 plus and its peer are available at around 5 to 7 P/E. With offers at hefty premium in the past, it also made bonus issues in the ratio of 3 for 1 in October 2012.
Considering the listless performance of other group company post listing and higher asking price for this offer, it is better to give it a miss.
Review By on January 15, 2013
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 Esteem Bio Organic Food Processing Ltd. offers an early investment opportunity in Esteem Bio Organic Food Processing Ltd.. A stock market investor can buy Esteem Bio Organic IPO shares by applying in IPO before Esteem Bio Organic Food Processing Ltd. shares get listed at the stock exchanges. An investor could invest in Esteem Bio Organic IPO for short term listing gain or a long term.
Read the Esteem Bio Organic IPO recommendations by the leading analyst and leading stock brokers.
Esteem Bio Organic IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Esteem Bio Organic IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Esteem Bio Organic IPO?"
Our recommendation for Esteem Bio Organic IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Esteem Bio Organic IPO.
The Esteem Bio Organic IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Esteem Bio Organic IPO allotment status to check.
