Review By on July 17, 2015
Pecos Hotels and Pubs Ltd (PHPL) is into the business of running of hotels and pubs in Bangalore, with 4 Pubs providing 70s, 80s and 90s retro rock music since last 10 years. Its focus is to bring alive the greatest of legends in the interiors, the lighting, the paintings, pictures, posters and the sounds. The theme of the pub cater to the 20-35 age group, who are in reasonably well paying jobs, unmarried with a decent disposable income and looking for fellowship in the evening.
To part finance its new Pub development plans, up gradation of existing facilities and raise general corpus fund, the company is coming out with an IPO of 459000 equity share of Rs. 10 each at a fixed price of Rs. 50 per share to mobilize Rs. 2.30 crore. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Issue opens for subscription on 23.07.15 and will close on 28.07.15. After issuing incorporation equity at par, it made preferential allotment at a price of Rs. 800 per share in March 2014 and at a price of Rs. 12 per share in January 2015. It has also issued bonus shares in the ratio of 2 for 1 in November 2013 and 20 for 1 in January 2015. Post issue its existing equity capital of Rs. 0.85 crore will stand enhanced to Rs. 1.31 crore. Issue is lead managed by Sarthi 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.
On performance front, for the fiscal 2013 and 2014 the company has posted turnover and net profits of Rs. 2.65 crore/0.07 crore and Rs. 2.92 crore/Rs. 0.01 crore respectively. For 10 months ended 31.01.15 it has reported net profit of Rs. 0.10 crore on a turnover of 2.49 crore. If we annualize this earnings and attribute to the asking price then the issue is at a P/E of 54 plus. Thus issue is exorbitantly priced.
As far as lead manager's track record is concerned, this is the 10th IPO from its stable and earlier mandates have mixed trends for rewards post listings.
Review By on July 17, 2015
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 Pecos Hotels & Pubs Ltd. offers an early investment opportunity in Pecos Hotels & Pubs Ltd.. A stock market investor can buy Pecos Hotels IPO shares by applying in IPO before Pecos Hotels & Pubs Ltd. shares get listed at the stock exchanges. An investor could invest in Pecos Hotels IPO for short term listing gain or a long term.
Read the Pecos Hotels IPO recommendations by the leading analyst and leading stock brokers.
Pecos Hotels IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Pecos Hotels IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Pecos Hotels IPO?"
Our recommendation for Pecos Hotels IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Pecos Hotels IPO.
The Pecos Hotels IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Pecos Hotels IPO allotment status to check.
