Review By on February 13, 2017
Nitiraj Engineers Ltd (NEL) is engaged in the manufacture and sale of wide range of Electronic Weighing Scales and Systems, Currency Counting Machines and Electronic Fare Meters. Company’s product portfolio range caters to both industrial and domestic consumption. NEL markets its products under the brand “Phoenix” through large network of dealers to customers in India as well as abroad. It produces more than 1,00,000 Scales per year and have more than one million customers.
To part finance development of new products, setting up of manufacturing units for existing and new products, expansion of marketing network and brand building and raise corpus fund, the company is coming out with a maiden IPO of 2200800 equity share of Rs. 10 each at a fixed price of Rs. 100 per share to mobilize Rs. 22.01 crore. Issue opens for subscription on 20.02.17 and will close on 01.03.17. Minimum application is to be made for 1200 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge platform. After initial capital at par, it issued bonus shares in the ratio of 5 for 1 in September 2015. Post issue, its current paid up equity capital of Rs. 6 crore will stand enhanced to Rs. 8.20 crore. Issue is solely lead managed by Arihant Capital Markets Ltd and Bigshare Services Pvt Ltd is the registrar to the issue.
On performance front, the company has posted turnover/net profit of Rs. 41.17 cr. / Rs. 3.89 cr. (FY14), Rs. 43.87 cr. / Rs. 4.18 cr. (FY15) and Rs. 56.54 cr. / Rs. 5.50 cr. (FY16). For first half ended on 30.09.16 it has posted net profit of Rs. 4.51 crore on a turnover of Rs. 32.01 crore. If we annualize these earnings and attribute on the fully diluted equity post IPO then asking price is at a P/E of 9 plus and at a P/BV of 1.6. The company has no listed peers to compare with.
On merchant banker’s front, this is the first SME mandate from its stable and has no track records for past issues in last three years.
Conclusion: Issue pricing appears to be reasonable. Cash surplus investors may consider investment for medium to long term.
Review By on February 13, 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 Nitiraj Engineers Ltd. offers an early investment opportunity in Nitiraj Engineers Ltd.. A stock market investor can buy Nitiraj Engineers IPO shares by applying in IPO before Nitiraj Engineers Ltd. shares get listed at the stock exchanges. An investor could invest in Nitiraj Engineers IPO for short term listing gain or a long term.
Read the Nitiraj Engineers IPO recommendations by the leading analyst and leading stock brokers.
Nitiraj Engineers IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Nitiraj Engineers IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Nitiraj Engineers IPO?"
Our recommendation for Nitiraj Engineers IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Nitiraj Engineers IPO.
The Nitiraj Engineers IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Nitiraj Engineers IPO allotment status to check.
