Review By on March 18, 2018
Kapston Facilities Management Ltd. (KFML) is in the business of providing private security and facility management services in India. It has emerged as the leading service provider in Telangana and Andhra Pradesh. KFML is an ISO 9001:2008 and OHSAS 18001:2007 certified company for providing integrated facility management services for security, housekeeping, M&E( Electro Mechanical) and Landscaping (Horticulture) and allied services. It is a MSAME certified with PSARA license and is a member of esteemed organizations such as APSA, SCSC, IISSM, CAPSI, SSSDC and FTAPCCI etc. Presently it has around 6394 employees and has over 12 branches in 10 cities of 8 states.
To part finance its repayment of loans, working capital and general corpus fund needs, KFML is coming out with a maiden IPO of 2304000 equity shares of Rs. 10 each (comprising fresh equity issue of 1152000 shares and offer for sale (OFS) of equal size) at a fixed price of Rs. 92 per share to mobilize Rs. 21.20 crore. Issue opens for subscription on 21.03.18 and will close on 23.03.18. Minimum application is to be made for 1200 shares and in multiples thereon, thereafter. Post issue, shares will be listed on NSE SME Emerge. Issue is solely lead managed by CKP Financial Services Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.50% of the post issue paid up capital of the company. Having initial equity issued at par, it raised further equity at a price of Rs. 80 per share and has issued bonus shares in the ratio of 49 for 1 (March 2014), 3 for 2 (December 2016), 1 for 5 (August 2017) and 3.5 for 1 (February 2018). Average cost of acquisition of shares by the promoters is Rs. 0.70 per share. Post issue, its current paid up equity capital of Rs. 7.54 cr. will stand enhanced to Rs. 8.69 cr.
On performance front, KFML has posted revenue/net profit of Rs. 41.52 cr. / Rs. 1.45 cr. (FY14), Rs. 58.91 cr. / Rs. 1.99 cr. (FY15), Rs. 74.99 cr. / Rs. 2.16 cr. (FY16) and Rs. 93.88 cr. / Rs. 3.06 cr. (FY17). For first nine months of the current fiscal, it has earned net profit of Rs. 4.38 cr. on revenue of Rs. 84.88 cr. Thus it has shown consistent growth in top and bottom lines. For last three fiscals, it has posted an average EPS of Rs. 3.58 and an average RoNW of 31.53%. Issue is priced at a P/BV of 4.68 on the basis of its NAV of Rs. 19.64 as on 31.12.17 and at a P/BV of 3.15 on the basis of post issue NAV of Rs. 29.22. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 14 against industry average of 96. It has shown listed peers Quess Corp and SIS that are currently trading at a P/E of around 59 and 197 respectively (as on 16.03.18). Thus it is priced very attractively.
On merchant banker’s front, this is the first mandate from its stable and has no track record.
Issue is attractively priced and has good performance track record. Investment may be considered for short to long term.
Review By on March 18, 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 Kapston Facilities Management Ltd. offers an early investment opportunity in Kapston Facilities Management Ltd.. A stock market investor can buy Kapston Facilities Management IPO shares by applying in IPO before Kapston Facilities Management Ltd. shares get listed at the stock exchanges. An investor could invest in Kapston Facilities Management IPO for short term listing gain or a long term.
Read the Kapston Facilities Management IPO recommendations by the leading analyst and leading stock brokers.
Kapston Facilities Management IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Kapston Facilities Management IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Kapston Facilities Management IPO?"
Our recommendation for Kapston Facilities Management IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Kapston Facilities Management IPO.
The Kapston Facilities Management IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Kapston Facilities Management IPO allotment status to check.
