Review By on August 30, 2016
Narayani Steel Ltd (NSL) is engaged in trading and manufacturing of hot rolled long products of value added steel. The company primarily trades in blooms, TMT Bars, billets, pellets etc and also manufactures TMT bars and other long products such as rounds, flats, angles, channels etc. Company aims to grow on PAN India basis and make its brand a distinguished name in the industry.
To part finance its working capital requirements and generate corpus funds, the company is issuing 3600000 equity shares of Rs. 10 each at a fixed price of Rs.32 per share to mobilize Rs. 11.52 crore. Issue opens for subscription on 01.09.16 and will close on 06.09.16. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Having issued equity at par during 1995 to 2008, it further issued equity at a price of Rs. 25 to Rs. 100 per share between 2011 and 2013. Its current paid up equity capital of Rs. 7.31 crore will stand enhanced to Rs. 10.91 crore post issues. Post allotment shares will be listed on BSE SME. Issue is lead managed by Pantomath Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue.
On performance front, for last four fiscals, the company has posted turnover/net profit of Rs. 475.92 cr. / Rs. 1.16 cr. (FY13), Rs. 580.25 cr. / Rs. 1.59 cr. (FY14), Rs. 599.96 cr. / Rs. 1.55 cr. (FY15) and Rs. 504.07 cr. / Rs. 1.39 cr. (FY16). It has suffered a setback for last fiscal. If we attribute the latest earnings on the fully diluted equity capital then asking price is at a P/E of 25 plus against 20 or below of its peers thus making it a pricy bet. However, the issue price is below 1 P/BV.
On merchant banker’s front, this is the 24th issue from its stable and it has mixed trends for its past mandates.
Conclusion: Pricing of the issue is on the higher side with nothing on tables for new investors. However, cash surplus risk savvy investors may consider it for long term investment; other may give it a miss.
Review By on August 30, 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 Narayani Steels Ltd. offers an early investment opportunity in Narayani Steels Ltd.. A stock market investor can buy Narayani Steels IPO shares by applying in IPO before Narayani Steels Ltd. shares get listed at the stock exchanges. An investor could invest in Narayani Steels IPO for short term listing gain or a long term.
Read the Narayani Steels IPO recommendations by the leading analyst and leading stock brokers.
Narayani Steels IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Narayani Steels IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Narayani Steels IPO?"
Our recommendation for Narayani Steels 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 Narayani Steels IPO.
The Narayani Steels IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Narayani Steels IPO allotment status to check.
