Review By on January 16, 2015
Karnavati Finance Ltd (KFL): is a NBFC company engaged in financing activities. To augment its fund requirement and listing of the equity, it is coming out with an IPO of 2580000 equity share of Rs. 10 each at par value to mobilize Rs. 2.58 crore. Issue opens for subscription on 19.01.15 and will close on 21.01.15. Post allotment shares will be listed on BSE SME. Minimum application is to be made for 10000 shares and in multiples thereon, thereafter. Issue is managed by Corporate Strategic Allianz Ltd and Satellite Corporate Services Pvt Ltd is the registrar to the issue. Post this issue, existing equity of Rs. 5.78 crore will rise to Rs. 8.36 crore.
For the past three fiscals the company has posted negative EPS of (-Rs. 0.64). For the year ended 31.3.14 it earned net profit of Rs. 0.04 crore on a total income of Rs. 0.37 crore translating into EPS of Rs. 0.07. For first four months ended 31.07.14 it posted loss of Rs. 0.05 crore on a total income of Rs. 0.09 crore. As on 31.07.14 its NAV stood at Rs. 8.09. Thus IPO is at a negative P/E as well as at 1.25 P/BV with dull performance so far.
Lead Manager has poor track record. This is the seventh mandate from it and earlier mandates failed to live up to the confidence of the investors. It had four main line IPOs and two SME lPOs in the past.
Considering entry barrier, poor performance of the company as well as low preference by broking community for SME IPOs, this issue is not worth.
Review By on January 16, 2015
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 Karnavati Finance Ltd. offers an early investment opportunity in Karnavati Finance Ltd.. A stock market investor can buy Karnavati Finance IPO shares by applying in IPO before Karnavati Finance Ltd. shares get listed at the stock exchanges. An investor could invest in Karnavati Finance IPO for short term listing gain or a long term.
Read the Karnavati Finance IPO recommendations by the leading analyst and leading stock brokers.
Karnavati Finance IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Karnavati Finance IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Karnavati Finance IPO?"
Our recommendation for Karnavati Finance IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Karnavati Finance IPO.
The Karnavati Finance IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Karnavati Finance IPO allotment status to check.
