Review By on March 13, 2017
Prime Customer Services Ltd (PCSL) is a multi-services customer focused organization and offer value added services to a whole range of clients spread across various business segments. It is engaged in the business of providing services; namely, warehousing solutions, cold storage and ripening solutions, manpower solutions and packaging solutions. The company is also engaged in trading of perishable food items, mainly fruits and vegetables in the domestic as well as export markets. PCSL’s customers are primarily located in the western India, majorly Gujarat and Maharashtra.
The company has started exporting fruits and vegetables in the year 2015-16, currently to U.A.E. Now the Company has reached a stage where it has entered into tie-up with large corporate from procurement of fruits and vegetables and operate a warehouse facility, cold storage & ripening chambers of approximately 10,180 sq. ft. totally and managing clients’ warehouse and cold storage facilities of approximately 2,55,700 sq. ft. currently.
To part finance its long term capital and general corpus fund needs, the company is coming out with a maiden IPO of 1214000 equity shares of Rs. 10 each at a fixed price of Rs. 60 per share to mobilize Rs. 7.28 crore. Issue opens for subscription on 20.03.17 and will close on 23.03.17. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Aryaman Financial Services Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. From MoA in 2007 till March 2008 it issued equity at par. Thereafter, it raised further equity at a price range of Rs. 25 to Rs. 40 per share during 2008-2014. It has also issued bonus shares in May 2016 in the ratio of 1 for 1 after forfeiting 200000 shares in the month of December 2015. Its current paid up equity capital of Rs. 3.04 crore will stand enhanced to Rs. 3.49 crore post issue.
On performance front, the company has posted turnover/net profits of Rs. 10.69 cr. / Rs. 0.06 cr. (FY13), Rs. 17.48 cr. / Rs. 0.10 cr. (FY14), Rs. 19.62 cr. / Rs. 0.08 cr. (FY15) and Rs. 21.05 cr. / Rs. 0.27 cr. (FY16). For the first half of the current fiscal it has earned net profit of Rs. 0.25 crore on a turnover of Rs. 13.92 cr. If we annualize latest earnings and attribute on fully diluted equity post issue, then asking price is at a P/E of 41 plus and a P/BV of over 4.5 making it a costly issue. As per prospectus, the company has no listed peers to compare with.
On merchant banker’s front, this is the 14th mandate in last three years and past mandates have shown mixed trends.
Conclusion: Considering aggressive pricing, only cash surplus risk savvy investors may consider investment for long term.
Review By on March 13, 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 Prime Customer Services Ltd. offers an early investment opportunity in Prime Customer Services Ltd.. A stock market investor can buy Prime Customer IPO shares by applying in IPO before Prime Customer Services Ltd. shares get listed at the stock exchanges. An investor could invest in Prime Customer IPO for short term listing gain or a long term.
Read the Prime Customer IPO recommendations by the leading analyst and leading stock brokers.
Prime Customer IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Prime Customer IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Prime Customer IPO?"
Our recommendation for Prime Customer 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 Prime Customer IPO.
The Prime Customer IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Prime Customer IPO allotment status to check.
