Review By on August 2, 2017
Geekay Wires Ltd (GWL) is in the business of manufacturing high quality galvanized steel wires and wire
products and have been meeting the requirement of various clients in the government and private sectors like power, construction, automobile, general engineering and domestic segments. GWL is an ISO 9001: 2008 certified, manufacturer, exporter and supplier of the superlative wires and cables like galvanized wire, earth wire, stay wire, ACSR steel core, cable armoured wire, guy strand, barbed wire, spring steel wire, patented wire, detonator wire, and spring steel wire, nails and fasteners etc.
The company has a full‐fledged quality testing laboratory and well qualified and experienced personnel. With robust infrastructure & testing facilities GWL is in the preferred-vendor list of PGCIL and in many State Transmission & Distribution Companies, electrical contractors, corporate engaged in turnkey business of creating infrastructure for power transmission & distribution, cable & conductor manufacturing, etc.
To part finance its working capital and general corpus fund needs, GWL is coming out with a maiden IPO of 3332000 equity share of Rs. 10 each at a fixed price of Rs. 33 per share to mobilize Rs. 11 crore. Issue opens for subscription on 09.08.17 and will close on 14.08.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely managed by Aryaman Financial Services Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. GWL has issued entire equity at par so far. Post issue, its current paid up equity capital of Rs. 5.00 crore will stand enhanced to Rs. 8.33 crore.
On performance front, the company has posted turnover/net profits of Rs cr. / Rs. 0.17 cr. (FY14), Rs. 61.12 cr. / Rs. 0.23 cr. (FY15), Rs. 81.06 cr. / Rs. 0.65 cr. (FY16) and Rs. 67.16 cr. / Rs. 0.65 cr. (FY17), For FY 17 although its top line has seen erosion, with the help of Rs. 2.84 crore other income, it has maintained bottom line. For last three fiscals it has posted an average EPS of Rs. 1.16 with average RoNW of 9.15%. Thus the asking price is at a P/E of around 28.45 (based on Rs. 5 crore paid up equity as on 31.03.17) against industry average of 19.30. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 42 and at a P/BV of 2.45. Thus issue pricing appears very greedy.
On merchant banker's front, as per prospectus details, this is the 16th mandate from its stable in last three fiscals. Out of last 10 listings, two issues opened at a discount to offer price, three just around offer price and the rest marked positive openings.
Conclusion: There is no harm in giving this highly priced issue a miss.
Review By on August 2, 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 Geekay Wires Ltd. offers an early investment opportunity in Geekay Wires Ltd.. A stock market investor can buy Geekay Wires IPO shares by applying in IPO before Geekay Wires Ltd. shares get listed at the stock exchanges. An investor could invest in Geekay Wires IPO for short term listing gain or a long term.
Read the Geekay Wires IPO recommendations by the leading analyst and leading stock brokers.
Geekay Wires IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Geekay Wires IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Geekay Wires IPO?"
Our recommendation for Geekay Wires IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Geekay Wires IPO.
The Geekay Wires IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Geekay Wires IPO allotment status to check.
