Review By on February 9, 2017
Krishna Phoschem Ltd (KPL) is primarily engaged in manufacturing of fertilizers, intermediate dyes and other allied chemical products in the state of Madhya Pradesh. It has emerged as the manufacturers of Benefited Rock Phosphate (BRP), Single Super Phosphate (SSP), Granulated Single Super Phosphate (GSSP), H-Acid, intermediate dyes and other allied chemicals. Company’s products Single Super Phosphate (SSP) and Granulated Single Super Phosphate (GSSP) is used in replenishing “P” (Phosohorous) in the soil and act as a fertilizer for crop. KPL manufactures specialized chemicals used for dying cloth such as H acid, E K acid, Vinyl sulphone, PNCBOSA, 4 sulphoantranilic acid, Violet acid, Sulpho Tobias acid. The chemicals produce by it is used as Dye intermediate specifically for textiles Industry.
For listing of its share, the company is coming out with a maiden IPO of 6576000 equity share of Rs. 10 each as offer for sale at a fixed price of Rs. 30 per share to mobilize Rs. 19.73 crore. Issue opens for subscription on 13.02.17 and will close on 16.02.17. Minimum application is to be made for 4000 shares and in multiple thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge platform. Issue is solely lead managed by Hem Securities Ltd and Link Intime India Pvt Ltd is the registrar to the issue. Except for issue at a price of Rs. 20 per share in November 14 and at a price of Rs. 23.50 in October 16, all equity is issued at par. It has also issued bonus shares in the ratio of 1 for 2 in December 2011. Being offer for sale, its post issue equity remains at Rs. 24.90 cr.
On performance front, the company has posted turnover/net profits of Rs. 90.84 cr. / Rs. 5.05 cr., (FY14), Rs. 77.26 cr. / Rs. 2.93 cr. (FY15) and Rs. 90.63 cr. / Rs. 3.15 cr. (FY16). For the eight months period ended at 30.11.16 it has posted turnover of Rs. 45.20 cr. with a net profit of Rs. 3.93 cr. If we annualize these earnings and attribute on the equity capital, then asking price is at a P/E of 12 plus against industry composite P/E of 20 plus. Offer is at a P/BV of around 1.3. Thus issue pricing appears reasonable.
On merchant banker’s front, this is the 27th mandate from their stable and earlier IPOs have shown mixed trends.
Conclusion: Good monsoon this year augurs well for this company. Cash surplus investors may consider investment for medium to long term.
Review By on February 9, 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 Krishana Phoschem Ltd. offers an early investment opportunity in Krishana Phoschem Ltd.. A stock market investor can buy Krishana Phoschem IPO shares by applying in IPO before Krishana Phoschem Ltd. shares get listed at the stock exchanges. An investor could invest in Krishana Phoschem IPO for short term listing gain or a long term.
Read the Krishana Phoschem IPO recommendations by the leading analyst and leading stock brokers.
Krishana Phoschem IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Krishana Phoschem IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Krishana Phoschem IPO?"
Our recommendation for Krishana Phoschem IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Krishana Phoschem IPO.
The Krishana Phoschem IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Krishana Phoschem IPO allotment status to check.
