Review By on March 16, 2017
Euro India Fresh Foods Ltd (EIFF) is a well known Gujarat based company supplying wide range of packaged snacks and fruit beverages products under its brand “Euro – Fresh Khao Healthy Raho”. The company is engaged in manufacturing of chips, extruder snacks, namkeen, farali, chikki, fruit beverages and packaged drinking water. While it manufactures chips, getmore (a variety of extruder snacks) and packaged drinking water, other products are manufactures by its group entities on their behalf. Namkeens are manufactured by both the parties. EIFF’s products comply with requisite food safety standards including ISO and FSSAI norms. For distribution channel it has 5 consignee depots, 93 super stockists and over 2800 distributors. So far it has covered 10 states in India and is in the process of setting up of its distribution network in Goa and Chhattisgarh.
To part finance its repayment of loans, working capital and general corpus fund needs, the company is coming out with a maiden IPO of 6571200 equity share of Rs. 10 each (comprising of fresh equity issue of 4800000 shares and offer for sale of 1771200 shares) at a fixed price of Rs. 78 per share to mobilize Rs. 51.26 crore. Issue opens for subscription on 21.03.17 and will close on 24.03.17. Minimum application is to be made for 1600 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Pantomath Capital Advisors Pvt Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. Its entire equity so far is issued at par. Post issue its current paid up equity capital of Rs. 20 crore will stand enhanced to Rs. 24.80 crore.
On performance front, the company has posted turnover/net profits of Rs. 11.81 cr. / Rs. (-0.02) cr. (FY13), Rs. 47.87 cr. / Rs. 0.26 cr. (FY14), Rs. 42.89 cr. / Rs. 0.41 cr. (FY15) and Rs. 47.56 cr. / Rs. (-0.05) cr.(FY16). For the first half of the current fiscal it has earned net profit of Rs. (-0.71) crore on a turnover of Rs. 22.89 crore. Thus on performance part, while its top line has almost remained stagnant, it has incurred losses in last 18 months working that has eroded its net worth that has turned negative. As on 30.09.16 its NAV stands at Rs. 9.94. Thus asking price has negative P/E and and P/BV of 7.8 times making it a costly offer.
On merchant banker’s front, this is the 39th mandate from its stable and past mandates have shown mixed trends. However, last 10 issues have shown positive trends on listing dates.
Conclusion: Based on stagnant working and negative net worth, one may give it a miss.
Review By on March 16, 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 Euro India Fresh Foods Ltd. offers an early investment opportunity in Euro India Fresh Foods Ltd.. A stock market investor can buy Euro India Fresh Foods IPO shares by applying in IPO before Euro India Fresh Foods Ltd. shares get listed at the stock exchanges. An investor could invest in Euro India Fresh Foods IPO for short term listing gain or a long term.
Read the Euro India Fresh Foods IPO recommendations by the leading analyst and leading stock brokers.
Euro India Fresh Foods IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Euro India Fresh Foods IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Euro India Fresh Foods IPO?"
Our recommendation for Euro India Fresh Foods IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Euro India Fresh Foods IPO.
The Euro India Fresh Foods IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Euro India Fresh Foods IPO allotment status to check.
