Review By on June 7, 2017
Globe Textiles (India) Ltd. (GTIL) is engaged in manufacturing of Garments, cotton printed fabrics, home textiles and fancy fabrics. It has three manufacturing units in and around Ahmedabad. GTIL caters both domestic as well as international markets and has been recognized by Government of India as a “One Star Export House” and holds a valid certificate from September, 2016 till September, 2021. The company holds OKO-TEK certification for its manufacturing units.
To part finance its working capital and general corpus fund requirements, the company is coming out with a maiden IPO of 2688000 equity share of Rs. 10 each at a fixed price of Rs. 51 per share to mobilize Rs. 13.71 crore. Issue opens for subscription on 12.06.17 and will close on 15.06.17. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Issue consists of fresh equity issue of 1368000 shares and 1320000 shares by way of offer for sale. From inception till 2006 it issued all equity at par. Thereafter it raised further equity in a price range of Rs.50-60. It also issued bonus in the ratio of 2 shares for every 1 share held in March 2017. Post issue its current paid up equity capital of Rs. 8.71 crore will stand enhanced to Rs. 10.08 crore. Post allotment, shares will be listed on NSE SME Emerge. Issue is lead managed by Hem Securities Ltd and Bigshare Services Pvt Ltd is the registrar to the issue.
On performance front, for last four fiscals, it has posted turnover/net profits of Rs. 166.30 cr. / Rs. 2.23 cr. (FY14), Rs. 175.26 cr. / Rs. 2.44 cr. (FY15), Rs. 183.16 cr. / Rs. 1.57 cr. (FY16) and Rs. 191.86 cr. / Rs. 3.25 cr. (FY17). It suffered a setback in bottom line for FY 16. If we attribute latest earnings on the fully diluted equity post issue, asking price is at a P/E of 15 plus (against industry composite P/E of 23 plus) and at a P/BV of 1.78. It has posted RoNW at an average of 10.99% for last three fiscals. Company’s peers are trading at a P/E of 18 to 51. Thus issue appears to have been priced reasonably.
On merchant banker’s front, this is the 33rd mandate from its stable and last 10 listings have given positive returns on the day of listing.
Conclusion: Investment may be considered for medium to long term.
Review By on June 7, 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 Globe Textiles (India) Ltd. offers an early investment opportunity in Globe Textiles (India) Ltd.. A stock market investor can buy Globe Textiles IPO shares by applying in IPO before Globe Textiles (India) Ltd. shares get listed at the stock exchanges. An investor could invest in Globe Textiles IPO for short term listing gain or a long term.
Read the Globe Textiles IPO recommendations by the leading analyst and leading stock brokers.
Globe Textiles IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Globe Textiles IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Globe Textiles IPO?"
Our recommendation for Globe Textiles IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Globe Textiles IPO.
The Globe Textiles IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Globe Textiles IPO allotment status to check.
