Review By on January 19, 2016
Ganga Pharmaceuticals Ltd (GPL) is a producer of quality bulk ayurvedic medicines in Mumbai. Apart from manufacturing, the company is also into marketing, distribution of Bulk Ayurvedic Medicines. Its product includes Ampachan Vati; Khadira Vati; Nirmalaya churna etc. Its products are available in liquid dosage form and solid dosage forms.
To part finance its production expansion, marketing and brand building and general corpus funds needs, GPL is coming out with a maiden IPO of 1024000 equity share of Rs. 10 each at a fixed price of Rs. 15 per share to mobilize Rs.1.54 crore. Issue opens for subscription on 29.01.16 and will close on 09.02.16. Minimum application is to be made for 8000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is lead managed by First Overseas Capital Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. Since inception till 2013 it issued all equity at par and then issued bonus shares in the ratio of 1 share for every 10 shares held in April 2015 and then issued 480000 equity shares at a price of Rs. 12 per share in May 2015. Its current paid up equity capital of Rs. 3.04 crore will stand enhanced to Rs. 4.06 crore post issue. This issue constitutes 25.21% dilution of post issue equity of the company.
On performance front, the company has posted turnover and net profit of Rs. 1.97 cr. /Rs. 0.02 cr. (FY12), Rs. 2.36 cr. /Rs. 0.026 cr. (FY13), Rs. 2.81 cr. /Rs. 0.03 cr. (FY14) and Rs. 2.87 cr./ Rs. 0.034 cr. respectively. For first six months ended 30.09.15 it has reported net profit of Rs. 0.047 cr. on a turnover of Rs. 1.29 cr. If we attribute these earnings on annualized basis on fully expanded equity post IPO then the asking price is at a P/E of 65 plus. Thus issue is aggressively priced.
Merchant banker has poor track record.
Issue is aggressively priced. Only risk savvy investors may consider investment for long term.
Review By on January 19, 2016
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 Ganga Pharmaceuticals Ltd. offers an early investment opportunity in Ganga Pharmaceuticals Ltd.. A stock market investor can buy Ganga Pharmaceuticals IPO shares by applying in IPO before Ganga Pharmaceuticals Ltd. shares get listed at the stock exchanges. An investor could invest in Ganga Pharmaceuticals IPO for short term listing gain or a long term.
Read the Ganga Pharmaceuticals IPO recommendations by the leading analyst and leading stock brokers.
Ganga Pharmaceuticals IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Ganga Pharmaceuticals IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Ganga Pharmaceuticals IPO?"
Our recommendation for Ganga Pharmaceuticals IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Ganga Pharmaceuticals IPO.
The Ganga Pharmaceuticals IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Ganga Pharmaceuticals IPO allotment status to check.
