Review By on September 18, 2017
Mehai Technology Ltd. (MTL) is a diversified company engaged into manufacturing of LED Bulbs, Fixtures, Moon Light Bulbs, Tubelights as well as assembling of Pen Drives and Power Banks. The company is selling its products through a set of dealers/distributors as well as online portals like Fliipkart, eBay, Amazon, Shopclues, PayTM etc. It is planning manufacturing of Pen Drives in near term.
To part finance its working capital and general corpus fund needs, MTL is coming out with a maiden IPO of 1500000 equity share of Rs. 10 each at a fixed price of Rs. 40 per share to mobilize Rs. 6.00 crore. Issue opens for subscription on 25.09.17 and will close on 28.09.17. 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 lead managed by SPA Capital Advisors Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 28.01% of fully diluted post issue paid up equity capital of the company. Having issued initial equity at par between incorporation and April 2014,it raised further equity at a price of Rs. 50 per share in April 2017 and has issued bonus in the ratio of 2 for 1 in June 2017. Post issue its current paid up equity capital of Rs. 3.86 crore will stand enhanced to Rs. 5.36 crore.
On performance front, MTL has posted turnover/net profits of Rs. 0.62 cr. / Rs. 0.01 cr. (FY15), Rs. 1.24 cr. / Rs. 0.02 cr. (FY16), Rs. 5.22 cr. / Rs. 0.31 cr. (FY17). For the first month ended on 30.04.17 of the current fiscal, it has earned net profit of Rs. 0.04 crore on a turnover of Rs. 0.29 crore. For last three fiscals it has reported weighted average EPS of Rs. 18.84 with an average RoNW of 43.34% on an equity capital of Rs. 1.29 crore. If we annualize this and attribute on fully diluted equity post issue, then asking price is at a P/E of 44 plus. As claimed in the prospectus it has no listed peers to compare with. Issue is priced at a P/BV of around 2.38. Thus issue is aggressively priced.
On merchant banker’s front, this is the 1st mandate from its stable and it has no track records.
Conclusion: No harm in giving this highly priced issue a miss.
Review By on September 18, 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 Mehai Technology Ltd. offers an early investment opportunity in Mehai Technology Ltd.. A stock market investor can buy Mehai Technology IPO shares by applying in IPO before Mehai Technology Ltd. shares get listed at the stock exchanges. An investor could invest in Mehai Technology IPO for short term listing gain or a long term.
Read the Mehai Technology IPO recommendations by the leading analyst and leading stock brokers.
Mehai Technology IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Mehai Technology IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Mehai Technology IPO?"
Our recommendation for Mehai Technology IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Mehai Technology IPO.
The Mehai Technology IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Mehai Technology IPO allotment status to check.
