Review By on February 15, 2013
Surat (Gujarat) based Kavita Fabrics Ltd (KFL) is engaged in manufacturing synthetic fabrics from man-made yarns by using weaving technology. Currently, our Company owns 36 jacquard power looms to undertake the weaving of the synthetic fabrics from man-made yarns. It manufactures synthetic fabrics in the form of semi-finished sarees and dress materials. To meet its long term working capital requirement, KFL is coming out with an issue of 1275000 equity share of Rs. 10 each at a price of Rs. 40 per share. Issue opens for subscription on 20.02.13 and will close on 22.02.13. Minimum application is to be made for 3000 shares and in multiples thereof, thereafter. Post issue, shares will be listed on BSE-SME. Issue is lead managed by Intensive Fiscal Services Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue.
As far as company's performance is concerned, it has posted an average EPS of Rs. 0.79 for last three fiscals and for the first five months ended 31.08.12, it has posted EPS of Rs. 0.90 with a net profit of Rs. 0.10 crore on a turnover of Rs. 2.14 crore. Translating this earnings on post issue equity of Rs. 3.47 crore, the EPS stands at Rs. 0.70 that marks P/E of 57 plus for the asking price of Rs. 40 per share and thus it is an expensive offer.
As for lead manager's track record, it managed 3 IPOs out of which, 1 failed to give listing gains on debut day. However, considering the aggressive pricing of the IPO, better give it a miss.
Review By on February 15, 2013
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 Kavita Fabrics Ltd. offers an early investment opportunity in Kavita Fabrics Ltd.. A stock market investor can buy Kavita Fabrics IPO shares by applying in IPO before Kavita Fabrics Ltd. shares get listed at the stock exchanges. An investor could invest in Kavita Fabrics IPO for short term listing gain or a long term.
Read the Kavita Fabrics IPO recommendations by the leading analyst and leading stock brokers.
Kavita Fabrics IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Kavita Fabrics IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Kavita Fabrics IPO?"
Our recommendation for Kavita Fabrics IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Kavita Fabrics IPO.
The Kavita Fabrics IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Kavita Fabrics IPO allotment status to check.
