Review By on September 26, 2016
Nandani Creation Ltd (NCL) is engaged in manufacturing and marketing of women apparels like kurtis, sarees, ethnic tops, palazzo, Patiala salwar suits, dupattas, quilted jackets, dress materials etc. All these products are sold under its brand name “Jaipurkurti.com”. NCL distributes its products by following e-retail model and has developed necessary infra for it. The company aims to expand its operations on PAN India basis in coming years.
To meet its working capital and general corpus fund requirements, the company is coming out with a maiden IPO of 1444000 equity share of Rs. 10 each at a fixed price of Rs. 28 per share to mobilize Rs. 4.04 crore. Issue opens for subscription on 28.09.16 and will close on 03.10.16. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge platform. Issue is jointly lead managed by Pantomath Capital Advisors Pvt Ltd and Indian Overseas Bank. Bigshare Services Pvt Ltd is the registrar to the issue. Having issued equity at par in 2012 and 2014, it issued bonus in the ratio of 5 for 1 on 11.05.16 and then converted shares at a price of Rs. 20 per share on 13.05.16 as well as on 01.08.16. Then it issued few more shares at Rs. 28 per share on 20.08.16. Its current paid up equity capital of Rs. 1.51 cr. will stand enhanced to Rs. 2.95 cr. post this issue.
On performance front, for the last four fiscals, the company has posted turnover /net profit of Rs. 0.59 cr. / Rs. 0.001 cr. (FY13), Rs. 1.90 cr. / Rs. 0.01 cr. (FY14). Rs. 4.82 cr. / Rs. 0.01 cr. (FY15) and Rs. 14.20 cr. / Rs. 0.20 cr. (FY16). Thus it has posted rise in top and bottom line. If we attribute latest earnings on fully diluted equity post IPO then asking price is at a P/E of 41 plus and at a P/BV of 2.56, thus making it a highly priced offer. Industry average P/E is at 15 as claimed by it in prospectus.
On merchant banker’s front, this is the 25th mandate from Pantomath whereas 1st from IOB. Pantomath has shown mixed trends for its past mandates on listings.
Conclusion: Being highly priced offer, only cash surplus risk savvy investors may park funds for long term, others may give it a miss.
Review By on September 26, 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 Nandani Creation Ltd. offers an early investment opportunity in Nandani Creation Ltd.. A stock market investor can buy Nandani Creation IPO shares by applying in IPO before Nandani Creation Ltd. shares get listed at the stock exchanges. An investor could invest in Nandani Creation IPO for short term listing gain or a long term.
Read the Nandani Creation IPO recommendations by the leading analyst and leading stock brokers.
Nandani Creation IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Nandani Creation IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Nandani Creation IPO?"
Our recommendation for Nandani Creation IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Nandani Creation IPO.
The Nandani Creation IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Nandani Creation IPO allotment status to check.
