Review By Dilip Davda on June 28, 2016
Kwality Pharmaceuticals Ltd (KPL) is engaged in the business of manufacturing of broad range of finished pharmaceutical formulations in a dosage form. According to the Company, it has the most modern & sophisticated plant, equipments, technique and manpower and is working with new SCHEDULE M and W.H.O. norms and certified with GMP and WHO certificate.
To part finance its laboratory modernization, working capital requirements, the company is coming out with a maiden IPO of 1380000 equity shares of Rs. 10 each at a fixed price of Rs. 45 per share to mobilize Rs. 6.21 crore. Issue opens for subscription on 30.06.16 and will close on 08.07.16. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely managed by Guiness Corporate Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. The issue comprises of fresh equity issue of just 180000 shares and rest is by way of offer for sale. Since incorporation till 2010 it issued equity at par. Then it issued fresh equity in the price range of Rs. 42 to Rs. 250 during 2012 to 2014. It also issued bonus shares in the ratio of 2 for 1 in 2003. Post issue its current paid up equity capital of Rs. 5.01 crore will stand enhanced to Rs. 5.19 crore.
On performance front, for the last three fiscals, the company has posted turnover and net profits of Rs. 59.74 cr. / Rs. 0.93 cr. (FY14) and Rs. 52.80 cr./ Rs. 0.79 cr. (FY15). For first nine months ended 31.12.15 it has posted net profit of Rs. 1.14 cr. on a turnover of Rs. 53.75 cr. If we annualized these earnings and attribute to fully diluted equity post issue, then asking price is at a P/E of 15 plus. Its peers are trading at a lower P/Es and thus making this issue a pricy bet.
On merchant banker’s front, this is 21st IPO from its stable and earlier mandates have seen some erratic movements post listing inviting suspension and the others have shown mixed trends.
Conclusion: Only risk aver investors with cash surplus may consider long term investment.
Review By Dilip Davda on June 28, 2016
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 Kwality Pharmaceuticals Ltd. offers an early investment opportunity in Kwality Pharmaceuticals Ltd.. A stock market investor can buy Kwality Pharmaceuticals IPO shares by applying in IPO before Kwality Pharmaceuticals Ltd. shares get listed at the stock exchanges. An investor could invest in Kwality Pharmaceuticals IPO for short term listing gain or a long term.
Read the Kwality Pharmaceuticals IPO recommendations by the leading analyst and leading stock brokers.
Kwality Pharmaceuticals IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Kwality Pharmaceuticals IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Kwality Pharmaceuticals IPO?"
Our recommendation for Kwality Pharmaceuticals IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Kwality Pharmaceuticals IPO.
The Kwality Pharmaceuticals IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Kwality Pharmaceuticals IPO allotment status to check.
