Review By on February 21, 2014
Karnimata Cold Storage Ltd. (KCSL): The company is engaged in the business of cold storage and trading of agricultural commodities currently specializing in potatoes. It has set up and made operational its first cold storage unit in Medinipur District, West Bengal having an installed capacity of 1,81,000 quintals for preservation of potatoes. The local farmer or traders of potatoes hire these services to store their produces prior to sell.
To meet working capital finance for providing seasonal loans to the hirers, KCSL is issuing 1518000 equity share of Rs. 10 each at a fixed price of Rs. 20 per share (i.e. at a premium of Rs. 10 per share) to mobilize Rs. 3.04 crore. Issue opens for subscription on 25.02.14 and will close on 03.03.14. Minimum application is to be made for 6000 shares and in multiples thereof, thereafter. Post this issue, its existing equity of Rs. 3.57 crore will enhance to Rs. 5.08 crore. Shares will be listed on BSE SME post allotments. Issue is lead managed by Aryaman Financial Services Ltd.and Bigshare Services Pvt. Ltd is the registrar to the issue.
As the company’s facility became operational in March 2012, it has just completed first full year of operation FY 2012-13 for which is earned net profit of Rs. 0.03 crore on a turnover of Rs. 3.77 crore. For first six months of current fiscal ended 30.09.13 it has earned net profit of Rs. 0.05 crore on a turnover of Rs. 2.03 crore giving an annualized EPS of Rs. 0.28. If we attribute these earnings on enhanced equity the EPS stands at Rs. 0.20 translating into asking price at a P/E of 100 and at a P/BV of 2 as its NAV as on 30.09.13 is at Rs.10.38.
Lead manager has poor track record with its 13 mandates of IPOs so far.
Avoid this costly offer with entry barriers.
Review By on February 21, 2014
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 Karnimata Cold Storage Ltd. offers an early investment opportunity in Karnimata Cold Storage Ltd.. A stock market investor can buy Karnimata Cold Storage IPO shares by applying in IPO before Karnimata Cold Storage Ltd. shares get listed at the stock exchanges. An investor could invest in Karnimata Cold Storage IPO for short term listing gain or a long term.
Read the Karnimata Cold Storage IPO recommendations by the leading analyst and leading stock brokers.
Karnimata Cold Storage IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Karnimata Cold Storage IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Karnimata Cold Storage IPO?"
Our recommendation for Karnimata Cold Storage IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Karnimata Cold Storage IPO.
The Karnimata Cold Storage IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Karnimata Cold Storage IPO allotment status to check.
