Review By on September 29, 2016
Mewar Hi-Tech Engineering Ltd (MHEL) is engaged in manufacturing of heavy manufacturing machines and industrial material handling equipments including pre-engineering building sheds, cranes, sand machines, concrete mixture machines, batch mixing plants, RMC (ready-mix concrete) plants, industrial products for crushing plants, Double Toggle Grease/Oil Crusher, Single Toggle Grease Jaw Crusher, Vibrating Screen, Horizontal Shaft Impactor, Vertical Shaft Impactor and Cone Crusher and other crushing, screening and customized size reduction equipments. The Company also provides after sales service and warranty facilities for such machines.
To part finance working capital needs and general corpus fund requirements, the company is coming out with a maiden IPO of 1062000 equity share of Rs. 10 each at fixed price of Rs. 22 per share to mobilize Rs. 2.34 crore. Issue opens for subscription on 30.09.16 and will close on 06.10.16. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely managed by Pantomath Capital Advisors Pvt Ltd. Bigshare Services Pvt Ltd is the registrar to the issue. It issued equity at par on incorporation and then all further equity is raised at a fixed price of Rs. 50 per share during 2008 to 2016. In March 2016 it issued bonus in the ratio of 3 for 1 in March 2016. Post issue its current paid up equity capital of Rs. 2.84 crore will stand enhanced to Rs. 3.90 crore.
On performance front, for last four fiscals, the company has reported turnover/net profits of Rs. 33.88 cr./ Rs. 0.64 cr. (FY13), Rs. 23.96 cr. / Rs. 0.32 cr. (FY14), Rs. 40.384 cr. / Rs. 0.19 cr. (FY15) and Rs. 25.35 cr. / Rs. (-0.02 cr.) (FY16). Thus it has shown inconsistency in its performance. However, if we attribute latest earnings on fully diluted equity post IPO then asking price is at a negative P/E and at a P/BV of 1.2 plus. If we attribute FY15 earnings then the asking price is at a P/E of around 44 plus that makes it a costly bet. Although asking price is below peers, its inconsistent performance in the major concern.
On merchant banker’s front, this is the 31st mandate and its past mandates have shown mixed trends.
Conclusion: Inconsistency in performance raises concern. Also being a costly bet, investors may give it a miss.
Review By on September 29, 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 Mewar Hi-Tech Engineering Ltd. offers an early investment opportunity in Mewar Hi-Tech Engineering Ltd.. A stock market investor can buy Mewar Hi-Tech Engineering IPO shares by applying in IPO before Mewar Hi-Tech Engineering Ltd. shares get listed at the stock exchanges. An investor could invest in Mewar Hi-Tech Engineering IPO for short term listing gain or a long term.
Read the Mewar Hi-Tech Engineering IPO recommendations by the leading analyst and leading stock brokers.
Mewar Hi-Tech Engineering IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Mewar Hi-Tech Engineering IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Mewar Hi-Tech Engineering IPO?"
Our recommendation for Mewar Hi-Tech Engineering IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Mewar Hi-Tech Engineering IPO.
The Mewar Hi-Tech Engineering IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Mewar Hi-Tech Engineering IPO allotment status to check.
