Review By on September 27, 2017
Milton Industries Ltd. (MIL) is engaged in manufacturing of Laminates, Artificial Leather cloth and Glass Fibre Reinforced Epoxy (GFRE) Sheets in the state of Gujarat. The company is the manufacturer and exporter of premium quality high-pressure laminates, industrial Laminates, laminated board, flooring laminates, artificial Leather cloth, GFRE Sheets and other allied products. Its superior quality laminates can be used on walls, doors, windows, cupboards, tabletops, hotels, cash counters, home kitchen, etc. Initially Company was engaged in manufacturing of laminates and further diversified in manufacturing and exports of Artificial Leather cloth and GFRE Sheets.
To part finance its working capital and general corpus fund needs, MIL is coming out with a maiden IPO of 4200000 equity share of Rs. 10 each at a fixed price of Rs. 34 per share to mobilize Rs. 14.28 crore. Issue opens for subscription on 29.09.17 and will close on 06.10.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Issue is solely lead managed by Swastika Investmart Ltd. and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Post allotment, shares will be listed on NSE SME Emerge. . Issue constitutes 27.18% of the post issue paid up capital of the company. It has issued equity at par and has also issued bonus shares in the ratio of 1 for 10 in October 1994, 1 for 1 in January 1995, 1 for 2 in August 1995, 1 for 5 in October 2000, 1 for 3 in December 2002 and 5 for 4 in July 2017. Post issue, its current paid up equity capital of Rs. 11.25 cr. will stand enhanced to Rs. 15.45 cr.
On performance front, MIL has reported turnover/net profits of Rs. 45.46 cr. / Rs. 0.74 cr. (FY14), Rs. 42.28 cr. / Rs. 0.63 cr. (FY15), Rs. 42.03 cr. / Rs. 0.22 cr. (FY16) and Rs. 43.63 cr. / Rs. 1.15 cr. (FY17). Thus while its top line has remained almost constant, its bottom line has seen roller-coaster ride. It has posted an average EPS of Rs. 0.67 and average RoNW of 5.81% for last three fiscals on an equity base of Rs. 5 crore. Issue is priced at a P/BV of 2.86. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 45 plus against industry average of 38 making it aggressively priced offer. Cost of acquisition of shares by promoters ranges from Rs. 4 to Rs. 12.
On merchant banker’s front, this is the 7th mandate from its stable and last five listings have given between 4 to 25% gains on the day of listing.
Conclusion: Considering aggressive pricing, risk savy cash surplus investors may consider investment for long term.
Review By on September 27, 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 Milton Industries Ltd. offers an early investment opportunity in Milton Industries Ltd.. A stock market investor can buy Milton Industries IPO shares by applying in IPO before Milton Industries Ltd. shares get listed at the stock exchanges. An investor could invest in Milton Industries IPO for short term listing gain or a long term.
Read the Milton Industries IPO recommendations by the leading analyst and leading stock brokers.
Milton Industries IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Milton Industries IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Milton Industries IPO?"
Our recommendation for Milton Industries IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Milton Industries IPO.
The Milton Industries IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Milton Industries IPO allotment status to check.
