Review By Dilip Davda on March 18, 2018
Orissa Bengal Carrier Ltd. (OBCL) is one of the IBA approved transporter having ISO 9001:2015 certification for provision of Quality Management System Service. It provides logistics to a broad range of industries including steel, coal, aluminum, cement, petrochemicals, paper, mable, tiles, infra, textile, FMCG etc. Services include full truck load, parcel and part truck load/ less then truck load. However, it largely focuses on full truck load segment. It currently has 45 branches spread across various regions in India and serves over 200 customers. It owns 93 vehicles and also takes on hire vehicles when need be.
To part finance its working capital and general corpus fund needs, OBCL is coming out with a maiden IPO of 5564000 equity shares of Rs. 10 each at a fixed price of Rs. 30 per share to mobilize Rs. 16.69 cr. Issue opens for subscription on 22.03.18 and will close on 26.03.18. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment shares will be listed on BSE SME. Issue is solely lead managed by Guiness Corporate Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.39% of the post issue paid up capital of the company. Having issued initial equity at par, it raised further equity in the price range of Rs. 50 to Rs. 1000 per share. It has also issued bonus shares in the ratio of 8 shares for every 1 share held in February 2018. Average cost of acquisition of shares by the promoters is Rs. 1.26, Rs. 1.73 and Rs. 1.89 per share. Post issue, its current paid up equity capital of Rs. 15.52 cr. will stand enhanced to Rs. 21.08 cr.
On performance front, OBCL has posted revenue/net profits of Rs. 185.19 cr. / Rs. 0.20 cr. (FY14), Rs. 206.50 cr. / Rs. 0.92 cr. (FY15), Rs. 220.56 cr. / Rs. 1.82 cr. (FY16) and Rs. 213.00 cr. / Rs. 3.95 cr. (FY17). For first half of the current fiscal, it has earned net profit of Rs. 3.51 cr. on revenue of Rs. 164.00 cr. For last three fiscals it has posted an average EPS of Rs. 15.88 and an average RoNW of 10.24% on an equity base of Rs. 1.72 cr. Issue is priced at a P/BV of 1.31 on the basis of its post issue NAV of Rs. 22.92. If we annualize latest earnings and attribute it on fully diluted post issue equity then asking price is at a P/E of around 9 against industry average of 29. It has shown its listed peers as Tiger Logistics, VRL Logistics and Chartered Logistics who are current trading at a P/E of around 19, 39 and 15 respectively (as on 16.03.18). Thus issue appears reasonably priced.
On merchant banker’s front, this is the 25th mandate from its stable in last three fiscals. Out of last 10 listings, 1 opened at discount to offer price, 1 at par and the rest eight with a premium ranging from 2.6% to 25% on the day of listing.
Considering reasonable pricing, track record and future prospects, investors may consider long term investment in this issue.
Review By Dilip Davda on March 18, 2018
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 Orissa Bengal Carrier Ltd. offers an early investment opportunity in Orissa Bengal Carrier Ltd.. A stock market investor can buy Orissa Bengal Carrier IPO shares by applying in IPO before Orissa Bengal Carrier Ltd. shares get listed at the stock exchanges. An investor could invest in Orissa Bengal Carrier IPO for short term listing gain or a long term.
Read the Orissa Bengal Carrier IPO recommendations by the leading analyst and leading stock brokers.
Orissa Bengal Carrier IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Orissa Bengal Carrier IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Orissa Bengal Carrier IPO?"
Our recommendation for Orissa Bengal Carrier 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 Orissa Bengal Carrier IPO.
The Orissa Bengal Carrier IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Orissa Bengal Carrier IPO allotment status to check.
