Review By on April 7, 2017
KMS Medisurgi Ltd (KML) is an arm of KMS group that has interests in stock broking and medical equipment and medical services. KMS Medisurgi was incepted with the purpose of making medical and surgical devices accessible to every possible medical center and professional. Under the banner, it ventured into ethical marketing and distribution of medical devices, surgical disposables, hemostat, surgery equipment, radiology, oncology, diagnostic, cardiology, critical care, urology, research and much other scientific equipment in India.
To meet its rising working capital requirements and generate corpus fund, the company is coming out with a maiden IPO of 900000 equity share of Rs. 10 each at a fixed price of Rs. 30 per share to mobilize Rs. 2.70 crore. Issue opens for subscription on 12.04.17 and will close on 17.04.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Navigant Corporate Advisors Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. After raising initial equity at par from MoA till 2002, it raised further equity at a price of Rs. 30 per share during 2016 and has issued bonus shares in the ratio of 1 for 1 in July 2016. Post issue, its current paid up equity capital of Rs.2.40 crore will stand enhanced to Rs. 3.30 crore.
On performance front, the company has posted turnover/net profits of Rs. 6.23 cr. / Rs. 0.05 cr. (FY13), Rs. 7.67 cr. / Rs. 0.03 cr. (FY14), Rs. 8.93 cr. / Rs. 0.03 cr. (FY15) and Rs. 8.48 cr. / Rs. 0.14 cr. (FY16). For the nine months ended on 31.12.16 it has earned net profit of Rs. 0.14 crore on a turnover of Rs. 5.70 crore. Thus sudden jump in bottom lines for the last one and half fiscal leads to some window dressing ahead of issue plans. If we annualize the latest earnings and attribute on fully diluted equity post issue then asking price is at a P/E of around 60 plus and at a P/BV of 2 plus. Its RoNW is just under 4 % for all these years. As per prospectus, it has no listed peers to compare with.
On merchant banker’s front, this is the 2nd mandate from its stable and the first issue gave returns on the listing day. However, the scrip is at discount to offer price now.
Conclusion: Based on performance the asking price is very high. Only risk avers cash surplus investors may consider investment, others may ignore.
Review By on April 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 KMS Medisurgi Ltd. offers an early investment opportunity in KMS Medisurgi Ltd.. A stock market investor can buy KMS Medisurgi IPO shares by applying in IPO before KMS Medisurgi Ltd. shares get listed at the stock exchanges. An investor could invest in KMS Medisurgi IPO for short term listing gain or a long term.
Read the KMS Medisurgi IPO recommendations by the leading analyst and leading stock brokers.
KMS Medisurgi IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the KMS Medisurgi IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is KMS Medisurgi IPO?"
Our recommendation for KMS Medisurgi IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the KMS Medisurgi IPO.
The KMS Medisurgi IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit KMS Medisurgi IPO allotment status to check.
