Review By Dilip Davda on April 11, 2018
Garv Industries Ltd. (GIL) is a recently incorporated company that has not completed a full financial year so far. It is a multiproduct trading and distribution company dealing in wide range of aluminium products and textile products.
To part finance its working capital and general corpus fund needs, GIL is coming out with a maiden IPO of 3200000 equity shares of Rs. 10 each at par to mobilize Rs. 3.20 crore. Issue opens for subscription on 12.04.18 and will close on 17.04.18. Minimum application is to be made for 10,000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Aryaman Financial Services Ltd. and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 31.37% of the post issue paid up capital of the company. Entire current equity of the company is issued at par. Average cost of acquisition of shares by the promoters is Rs. 10. Post issue its current paid up equity capital of Rs. 7.00 crore will stand enhanced to Rs. 10.20 crore.
On performance front, for four months working ended on 31.01.18 it has earned net profit of Rs. 0.11 crore on a turnover of Rs. 14.59 crore. It has no past track record of financial data. Issue is priced at a P/BV of 1.01 on the basis of its NAV of Rs. 9.91 as on 31.01.18 and at a P/BV of 1.00 on the basis of post issue NAV of Rs. 9.93. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 161 against industry average P/E of 64 thus despite at par offer, it’s a costly bet. It has no listed peers to compare with.
On merchant banker’s front, this is the 33rd mandate from its stable in last four fiscals. Out of last 10 listings 4 opened at discount and the rest with a premium ranging from 1% to 2.5% on the day of listing. Thus it has a poor track record.
Although this is an at par offer, only cash surplus risk savvy investors may consider moderate investment for long term at their own risk.
Review By Dilip Davda on April 11, 2018
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 Garv Industries Ltd. offers an early investment opportunity in Garv Industries Ltd.. A stock market investor can buy Garv Industries IPO shares by applying in IPO before Garv Industries Ltd. shares get listed at the stock exchanges. An investor could invest in Garv Industries IPO for short term listing gain or a long term.
Read the Garv Industries IPO recommendations by the leading analyst and leading stock brokers.
Garv Industries IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Garv Industries IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Garv Industries IPO?"
Our recommendation for Garv Industries IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Garv Industries IPO.
The Garv Industries IPO allotment status will be available on or around April 20, 2018. The allotted shares will be credited in demat account by April 24, 2018. Visit Garv Industries IPO allotment status to check.
