Review By on March 15, 2017
Oceanic Foods Ltd (OFL) is engaged in manufacturing of dehydrated food products. It exports dehydrated vegetables to various countries around the globe. Its products are internationally certified by US FDA, Kosher and Halal and are domestically certified by FSSAI, and APEDA. OFL currently have two manufacturing units spread over more than 5 acres in aggregate. Unit I is situated at Lalpur, Jamnagar spread over 5 acres and Unit II situated at Jamnagar spread over half acre. Unit I is an automated plant where primary process of dehydration is carried out at Unit I which includes peeling, washing, slicing and steam drying. Unit II carries out Secondary Process of Dehydration which includes oven drying and toasting. The company has an in-house Laboratory for testing the quality of our products.
To part finance its working capital and general corpus fund needs, the company is coming out with a maiden IPO of 1000000 equity share of Rs. 10 each at a fixed price of Rs. 65 per share to mobilize Rs. 6.50 crore. Issue opens for subscription on 20.03.17 and will close on 22.03.17. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Issue is solely lead managed by Pantomath Capital Advisors Pvt Ltd and Link Intime India Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE SME. Having issued all equity at par in 1993 and 1995, it also issued bonus shares in the ratio of 10 for 1 in January 2016. Post issue its current paid up equity capital of Rs. 2.75 crore will stand enhanced to Rs. 3.75 crore.
On performance front, the company has posted turnover/net profits of Rs. 50.24 cr. / Rs. 1.22 cr. (FY13), Rs. 71.53 cr. / Rs. 1.30 cr. (FY14), Rs. 81.34 cr. / Rs. 1.23 cr. (FY15) and Rs. 62.84 cr. / Rs. 1.70 cr. (FY16). For the first half of the current fiscal it has posted net profit of Rs. 0.37 cr. on a turnover of Rs. 39.76 cr. If we annualize the latest earnings and attribute it on fully diluted equity post issue then asking price is at a P/E of around 32 plus and at 1.7 P/BV making it highly priced offer. The company has faced set back in last two years as indicated by the performance.
On merchant banker’s front, this is 38th mandate from its stable and past mandates have shown mixed trends.
Conclusion: As the issue is aggressively priced, only risk savvy cash surplus investors may consider investment for long term.
Review By on March 15, 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 Oceanic Foods Ltd. offers an early investment opportunity in Oceanic Foods Ltd.. A stock market investor can buy Oceanic Foods IPO shares by applying in IPO before Oceanic Foods Ltd. shares get listed at the stock exchanges. An investor could invest in Oceanic Foods IPO for short term listing gain or a long term.
Read the Oceanic Foods IPO recommendations by the leading analyst and leading stock brokers.
Oceanic Foods IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Oceanic Foods IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Oceanic Foods IPO?"
Our recommendation for Oceanic Foods 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 Oceanic Foods IPO.
The Oceanic Foods IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Oceanic Foods IPO allotment status to check.
