Review By on September 23, 2014
Powerhouse Fitness and Realty Ltd (PFRL) is a fitness chain operating in Mumbai and also have the presence in Surat and Jaipur through franchise. PFRL operates Gyms under the brand “Powerhouse Gyms” which is owned by Powerhouse Gyms International headquartered in Detroit, USA.
Its Gyms are state of the art facilities with services including gyms, steam, aerobics and diet counseling amongst others. The first gym was established in May 1999, as “Q’s Fitness Studio” a proprietary firm as its sole proprietor at Santacruz West, Mumbai. After the success of the Santacruz centre another centre was set up at Vile Parle, Mumbai in October 2004. “Q’s Fitness Studio” has signed a Master Licensing Agreement dated March 21, 2005 with Powerhouse Licensing LLC, which provides PFRL with the exclusive right to set up and operate Powerhouse Gyms and to use and license of the Powerhouse Gyms and the associated trademarks in the gyms in India, Nepal, Bangladesh and Sri Lanka set up and run Powerhouse gyms in India, Sri Lanka, Nepal, Bangladesh and Maldives. The first Powerhouse fitness centre in India was set up in November 2005 at at Juhu (Mumbai). The centres at Santacruz and Vile Parle were converted to Powerhouse.
Currently, PFRL 12 Powerhouse Gyms in Mumbai located at Juhu, Vile Parle, Chembur, Ghatkopar, Mulund(W), Chowpatty, Prabhadevi, Andheri(E), 4 Bunglows, Malad (W), Mumbai Central and Colaba. It also operates 13 fitness centres in Mumbai and three franchisees in Santacruz (Mumbai), Surat and Jaipur. The company has also entered into a leave and license agreement for the opening of Gym in Thakur Complex, Kandivali (East) and interior work has commenced. As on date PFRL has approximately 9000 members in all our gyms including our franchisees.
Now to part finance its expansion plans of setting up six new gyms in western and eastern suburbs of Mumbai and to meet corpus fund, the company is coming out with an IPO of 2400000 equity share of Rs. 10 each at a fixed price of Rs. 30 per share for listing on BSE SME. The issue opens for subscription on 29.09.14 and will close on 09.10.14. Minimum application is to be made for 4000 shares and in multiples thereof, thereafter. Issue is lead managed by First Overseas Capital Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Its present paid up equity capital of Rs. 4.50 crore will rise to Rs. 6.90 crore post issues.
On performance front, the company has earned net profit of Rs. 0.08 crore on a total turnover of Rs. 3.89 crore for the fiscal 2013-14 translating in and EPS of Rs. 0.47 on a paid up capital of Rs. 4.04 crore. If we attribute this earning on enhanced equity post IPO then EPS stands at Rs. 0.11 resulting in asking price at a P/E of 270 plus against Talwarkar’s P/E of around 17.
On merchant banker’s front, this is the first mandate and has no past track record.
Avoid this exhorbitantly priced SME offer that has entry and trading barriers of minimum investment.
(Disclaimer: Author has no plans to invest in this IPO)
Review By on September 23, 2014
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 Powerhouse Fitness & Realty Ltd. offers an early investment opportunity in Powerhouse Fitness & Realty Ltd.. A stock market investor can buy Powerhouse Fitness IPO shares by applying in IPO before Powerhouse Fitness & Realty Ltd. shares get listed at the stock exchanges. An investor could invest in Powerhouse Fitness IPO for short term listing gain or a long term.
Read the Powerhouse Fitness IPO recommendations by the leading analyst and leading stock brokers.
Powerhouse Fitness IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Powerhouse Fitness IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Powerhouse Fitness IPO?"
Our recommendation for Powerhouse Fitness IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Powerhouse Fitness IPO.
The Powerhouse Fitness IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Powerhouse Fitness IPO allotment status to check.
