Review By on December 18, 2017
Moksh Ornaments Ltd. (MOL) is in the business of manufacture and wholesale of jewellery and head quartered at Mumbai, Maharashtra. The jewelleries are manufactured on job work basis at Kolkata and Mumbai. MOL primarily sells gold jewellery and its product profile includes bangles, chain, and mangalsutra. Its focus is on developing new designs that meet customer’s requirements as well as cater to their tastes and specifications. It offers regular designs and guarantee esteemed customers for the time bound delivery of the products. Company procures the required gold from various banks and local markets.
To part finance its repayment of certain loans, working capital and general corpus fund needs, MOL is coming out with a maiden IPO of 2982000 equity shares of Rs. 10 each at a fixed price of Rs. 37 per share to mobilize Rs. 11.03 crore. Issue opens for subscription on 21.12.17 and will close on 26.12.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue constitutes 27.79% of the post issue paid up capital of the company. Issue is solely lead managed by Guiness Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. The average cost of acquisition of equity shares by the promoters is Rs. 9.67 per share. Having raised initial equity on incorporation at par, it raised further equity at a price of Rs. 15 per share in December 14 and August 15. It also issued bonus shares in the ratio of 1 for 2 in August 2017. Post issue, its current paid up equity capital of Rs. 7.75 crore will stand enhanced to Rs. 10.73 crore.
On performance front, MOL has reported turnover/net profits of Rs. 80.95 cr. / Rs. 0.13 cr. (FY14), Rs. 110.91 cr. / Rs. 0.17 cr. (FY15), Rs. 143.01 cr. / Rs. 0.15 cr. (FY16) and Rs. 239.93 cr. / Rs. 2.87 cr. (FY17), Thus sudden rise in top and bottom lines for FY 17 is surprising. For the first seven months of the current fiscal ended on 31.10.17 it has posted net profit of Rs. 1.89 crore on a turnover of Rs. 169.43 crore. For past three fiscals it has posted an average EPS of Rs. 3.23 and an average RoNW of 14.86% on an equity base of Rs. 5.17 crore. Issue is priced at a P/BV of 2.25 on the basis of its NAV as on 31.10.17 and at a P/BV of 1.77 on the basis of post issue NAV. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 12 plus against industry average of 42 plus and peers trading at a P/E of around 34 (PCJ), 46 (Thangamayl) and 42 (TBZ) {as on 18.12.17}.Thus issue pricing appears reasonable.
On merchant banker’s front, this is the 21st mandate from its stable in past three years. Out of last 10 listings, 3 opened at a discount, 2 at par and the rest at a premium ranging from 5% to 20% to offer price on the day of listing.
Conclusion: Considering reasonable pricing, moderate investment may be considered for medium to long term. (Subscribe).
Review By on December 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 Moksh Ornaments Ltd. offers an early investment opportunity in Moksh Ornaments Ltd.. A stock market investor can buy Moksh Ornaments IPO shares by applying in IPO before Moksh Ornaments Ltd. shares get listed at the stock exchanges. An investor could invest in Moksh Ornaments IPO for short term listing gain or a long term.
Read the Moksh Ornaments IPO recommendations by the leading analyst and leading stock brokers.
Moksh Ornaments IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Moksh Ornaments IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Moksh Ornaments IPO?"
Our recommendation for Moksh Ornaments IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Moksh Ornaments IPO.
The Moksh Ornaments IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Moksh Ornaments IPO allotment status to check.
