Review By on September 19, 2017
Poojawestern Metaliks Ltd. (PML) is engaged in manufacturing of Brass and Brass Equipments to cater to the international markets. It has been exporting its products to Arab and Gulf countries since last 14 years. PML’s product basket includes brass billets, ingots, brass bars, brass and chrome plumbing fittings, brass inserts and adapters for CPVC and PPR pipes etc. All these products are sold in the name of “P-“brand.
To part finance its working capital and general corpus fund needs, PML is coming out with a maiden IPO of 1521000 equity share of Rs. 10 each at a fixed price of Rs. 36 per share to mobilize Rs. 5.48 crore.. Issue opens for subscription on 22.09.17 and will close on 26.09.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 29.99% of fully diluted post issue paid up equity capital of the company. Its entire equity is issued at par and also included bonus shares issued in the ratio of 254 for every 1 share in January 2017. Post issue its current paid up equity capital of Rs. 3.55 crore will stand enhanced to Rs. 5.07 crore. Cost of acquisition by promoters is just below Rs. 4.70 per share.
On performance front, PML has posted turnover/net profits of Rs. 4.49 cr. / Rs. – (0.01) cr. (FY14), Rs. 15.18 cr. / Rs. 0.10 cr. (FY15) and Rs. 14.92 cr. / Rs. 0.12 cr. (FY16). Thus it has shown inconsistency in top line. Due to restricting of the company it has shown two separate set of performance from 01.04.16 to 08.11.16 and from 09.11.16 to 31.03.17. For these sets it has posted turnover/net profits of RS. 4.66 crore / Rs. 2.71 crore and net profits of Rs. 0.10 cr. and Rs. 0.12 cr. respectively. For the current fiscal, for the period ended on 01.05.17 it has reported turnover of Rs.0.96 cr. with a loss of Rs. – (0.03) cr. Last three fiscal’s average EPS is Rs.0.65 and as on 01.05.17 EPS is negative – (Rs. 0.07). Average RoNW for last three years is 0.73%. Issue is priced at a P/BV of 3.50. Thus issue is highly priced.
On merchant banker’s front, this is the 48th mandate from Pantomath in last three years. Out of last 10 recent listings, 1 opened at discount, 1 at par and the rest with 1 to 18% premium on IPO price.
Conclusion: Considering poor working track record and high pricing of the issue, there is no harm in giving it a miss.
Review By on September 19, 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 Poojawestern Metaliks Ltd. offers an early investment opportunity in Poojawestern Metaliks Ltd.. A stock market investor can buy Poojawestern Metaliks IPO shares by applying in IPO before Poojawestern Metaliks Ltd. shares get listed at the stock exchanges. An investor could invest in Poojawestern Metaliks IPO for short term listing gain or a long term.
Read the Poojawestern Metaliks IPO recommendations by the leading analyst and leading stock brokers.
Poojawestern Metaliks IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Poojawestern Metaliks IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Poojawestern Metaliks IPO?"
Our recommendation for Poojawestern Metaliks IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Poojawestern Metaliks IPO.
The Poojawestern Metaliks IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Poojawestern Metaliks IPO allotment status to check.
