Review By Dilip Davda on September 5, 2011
PG Electroplast Ltd. is a flagship company of the Gupta group from north and is engaged in a variety of consumer durable products and related accessories along with its assemblies.
The company that started with black and while TV component manufacturing ventured into TV set assemblies on contract basis and paved the way for making of CTVs and other products like CFL, DVDs, Water Purifiers, AC and PCB assemblies/sub-assemblies.
Currently it has four units at UP, Uttarakhand and Maharashtra region and enjoys the status of Electronic Manufacturing Service provider to majors OEMs in India. The company is now planning to expand its 3rd and 4th unit along with repayment of high cost debt and raise general corpus fund.
To part-finance these, it is offering 5745000 equity share of Rs. 10 each within a price band of Rs. 190-210. The company will generate Rs. 109.15 crore to Rs. 120.64 crore on the basis of lower and the upper price band. The issue opens for subscription on September 7 and closes on September 12. Post issue, shares will be listed on BSE and NSE. CARE has assigned IPO grade 3 to this IPO indicating average fundamentals of the company. Minimum application is to be made for 30 shares and in multiples thereof.
Almondz Global Securities Ltd. is the sole BRLM and Karvy Computershare Pvt Ltd. is the registrar to the issue.
As far as BRLM is concerned, out of 10 IPOs brought by this merchant banker, six gave negative returns on the debut day.
For the past three years, the company has posted an average EPS of Rs. 11.92. For fiscal 10-11, it earned a net profit of Rs.17.90 crore on a turnover of Rs. 423.97 crore, translating into an EPS of Rs. 16.78.
On fully diluted equity post this IPO, the EPS stands at Rs.10.22 and on this basis, the issue is priced at a P/E of 18.6 to 20.5 based on lower and upper price band. Considering NAV of Rs. 40.92 as on 31.3.2011, the asking price is at an average of 4.9 P/BV. The issue looks aggressively priced and hence worth giving a miss.
Review By Dilip Davda on September 5, 2011
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 PG Electroplast Ltd. offers an early investment opportunity in PG Electroplast Ltd.. A stock market investor can buy PG Electroplast IPO shares by applying in IPO before PG Electroplast Ltd. shares get listed at the stock exchanges. An investor could invest in PG Electroplast IPO for short term listing gain or a long term.
Read the PG Electroplast IPO recommendations by the leading analyst and leading stock brokers.
PG Electroplast IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the PG Electroplast IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is PG Electroplast IPO?"
Our recommendation for PG Electroplast IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the PG Electroplast IPO.
The PG Electroplast IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit PG Electroplast IPO allotment status to check.
