Review By Dilip Davda on September 28, 2017
Omfurn India Ltd. (OIL) is engaged in providing premium quality commercial furniture to its customers. Company produces innovative and operational commercial furniture solutions for all work and commercial environments. It manufactures and supply modular furniture which broadly includes hotel furniture, office furniture, school furniture, wooden shutter doors & door frames in terms of customized, system based or Turnkey projects throughout India. It also supplies tailored outfits as per the choice of customers.
To part finance its expansion project and general corpus fund needs, OIL is coming out with a maiden IPO of 1812000 equity shares of Rs. 10 each at a fixed price of Rs. 23 per share to mobilize Rs.4.17 crore. Issue opens for subscription on 29.09.17 and will close on 05.10.17. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue constitutes 26.60% of post issue paid up equity capital of the company. Issue is solely lead managed by Sarthi Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. From incorporation till July 1998 it raised equity at par and has issued bonus shares in the ratio of 9 for 1 in March 2007 and again 9 for 1 in February 2017. Post issue, its current paid up equity capital of Rs. 5.00 crore will stand enhanced to Rs. 6.81 crore. Cost of acquisition of shares by promoters is Rs. –(0.13) per share. (i.e. almost zero cost)
On performance front, OIL has posted turnover/net profits of Rs. 19.76 cr. / Rs. 0.76 cr. (FY14), Rs. 38.66 cr. / Rs. 1.31 cr. (FY15), Rs.43.88 cr. / Rs. 1.87 cr. (FY16) and Rs. 28.19 cr. / Rs. 1.61 cr. (FY17). It has suffered a setback for FY 17 in top line. OIL has posted an average EPS of Rs. 3.30 and average RoNW of 11.42% for last three fiscals. Issue is priced at a P/BV of 0.74 (i.e. below 1). If we attribute latest earnings on fully diluted post issue equity then asking price is at a P/E of around 9.7. As per prospectus, it has no listed peers to compare with.
On merchant banker’s front, this is the 33rd mandate from its stable and out of last 10 listings 2 got listed at discount, 1 at par, and the balance 7 with a premium ranging from 3 to 131 per cent on the day of listing.
Conclusion: Although issue pricing is lucrative, considering decline in top line its immediate future looks gloomy, risk savvy investors may consider investment for long term.
Review By Dilip Davda on September 28, 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 Omfurn India Ltd. offers an early investment opportunity in Omfurn India Ltd.. A stock market investor can buy Omfurn India IPO shares by applying in IPO before Omfurn India Ltd. shares get listed at the stock exchanges. An investor could invest in Omfurn India IPO for short term listing gain or a long term.
Read the Omfurn India IPO recommendations by the leading analyst and leading stock brokers.
Omfurn India IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Omfurn India IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Omfurn India IPO?"
Our recommendation for Omfurn India 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 Omfurn India IPO.
The Omfurn India IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Omfurn India IPO allotment status to check.
