Review By Dilip Davda on March 5, 2012
Olympic Cards Ltd. (OCL) is a 50 year old company and currently enjoying Numero Uno status in south in Wedding cards segment. It has over 53% of its total revenue coming from Wedding cards business and rest from Greeting Cards, Envelopes, Calendars, Business Cards, Notebooks etc.
Now the company is setting up a new state of the art unit for Wedding Cards manufacturing and also mulls setting up of own retail outlets and appointing franchises. To part finance the said programmer, the company is offering equity share of Rs. 10 each within a price band of Rs. 30-32 to mobilize Rs. 25 crore. From this, approximately Rs. 20 crore will go for new unit, Rs. 3 crore for enhancing its own retail outlets to 10 from 6 and the rest for other corpus funds. Issue opens for subscription on 09.03.2012 and will close on 13.03.2012. Minimum application is to be made for 200 shares and in multiples thereof thereafter. The issue is lead managed by Ashika Capital Ltd. And registrar to the issue is Cameo Corporate Services Ltd. CRISIL has assigned 'IPO Grade 1' to this offer indicating at poor fundamentals of the company. Post issue the shares will be listed only on BSE. This issue represents around 48% dilution of the enhanced equity.
As far as sole BRLM is concerned, out of four IPOs it brought in the past only 2 IPOs managed to reward investors on the debut day. Thus the ratio of success is very poor. Despite this, greed for aggressive pricing is still adhere too.
OCL has posted an average EPS of Rs. 2 for past three years. For the first nine months of the current fiscal it has earned net profit of Rs. 1.93 crore on a turnover of Rs. 32.73 crore. These translate into a P/E of 20 plus on the fully diluted equity post this issue. Although the company claims that the peer industry that are trading at and around 10 P/E are not falling in line of production that OCL has.
Aggressive pricing of the IPO makes it a bet only for the risk aver investors to park moderate funds for listing gains, if any.
Review By Dilip Davda on March 5, 2012
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 Olympic Cards Ltd. offers an early investment opportunity in Olympic Cards Ltd.. A stock market investor can buy Olympic Cards IPO shares by applying in IPO before Olympic Cards Ltd. shares get listed at the stock exchanges. An investor could invest in Olympic Cards IPO for short term listing gain or a long term.
Read the Olympic Cards IPO recommendations by the leading analyst and leading stock brokers.
Olympic Cards IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Olympic Cards IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Olympic Cards IPO?"
Our recommendation for Olympic Cards IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Olympic Cards IPO.
The Olympic Cards IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Olympic Cards IPO allotment status to check.
