Review By on August 24, 2016
Madhya Bharat Agro Products Ltd (MBAPL) is manufacturing Beneficiated Rock Phosphate (BRP), Single Super Phosphate (SSP) and Sulphuric Acid which is used in large quantities for replenishing “P” (Phosphorus) in the soil and act as a fertilizer for the crop. Our Company has entered into the backward integration by manufacturing of Beneficiated Rock Phosphate (BRP) and Sulphuric Acid which is used as a raw material for manufacturing of SSP. The company is also engaged in business of Purchase and Sale of (Trading) of Textiles and agricultural commodity.
Company’s product has unique features like - Lowest price per kg preferred by small and marginal farmers - Multi-nutrient fertilizer containing P2O5 as primary nutrient and Sulphur and Calcium as secondary nutrients - It is the cheapest source of Sulphur for the Soil - Only Phosphatic fertilizer which can utilize Indian rock phosphate deposits.
For listing gains, the company is coming out with a maiden offer for sale of 5790000 equity share of Rs. 10 each at a fixed price of Rs. 24 per share to mobilize Rs. 13.90 crore. Issue opens for subscription on 29.08.16 and will close on 02.09.16. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME –Emerge platform. Issue is lead managed by Hem Securities Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Its paid up capital will remain at Rs.21.91 crore post issue. From incorporation till Sept 2000 it issued equity at par and then at a price of Rs. 73.70 per share in 2007. Again it issued equity at par during 2009-2010 and then further equity in a price range of Rs. 24 to Rs. 100 per share. It has also issued bonus in the ratio of 2 for 1 in August 2009.
On performance front, as per restated statements, the turnover / net profits of the company were Rs. 58.96 cr. / Rs. 3.67 cr. (FY14), Rs. 68.43 cr. / Rs. 4.04 cr. (FY15) and Rs. 64.78 cr. / Rs. 9.45 cr. (FY16). Based on latest earnings, the asking price is at a P/E of around 6 that compares well against industry composite of 15 plus with the high and low of 25.77 and 6.82.
On merchant banker’s front, this is the 19th mandate from its stable and earlier 18 issues have shown mixed trends.
Conclusion: Investors may consider investment for medium to long term as this year normal monsoon is predicted.
Review By on August 24, 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 Madhya Bharat Agro Products Ltd. offers an early investment opportunity in Madhya Bharat Agro Products Ltd.. A stock market investor can buy Madhya Bharat Agro Products IPO shares by applying in IPO before Madhya Bharat Agro Products Ltd. shares get listed at the stock exchanges. An investor could invest in Madhya Bharat Agro Products IPO for short term listing gain or a long term.
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Our recommendation for Madhya Bharat Agro Products IPO is to subscribe.
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The Madhya Bharat Agro Products IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Madhya Bharat Agro Products IPO allotment status to check.
