Review By Dilip Davda on September 21, 2011
RDB Rasayaans Ltd. (RDBRL): The Company is promoted by RDB group that has interests in developing Real Estate, Cigarettes, Print & Packaging and warehousing. This company is engaged in engaged in manufacture and sale of FIBC (Jumbo Bags) and Woven Sacks and various woven polymer based products like Container Liners, Protective irrigation system, Canal Liners, etc. PP sacks are mainly used for packing the different products in the fertilizers, cement, polymers, chemicals, textiles, machinery, automobiles and steel industry etc.
RDB Rasayans produces FIBCs of U+2 panel, Circular Jumbo bags, Baffle bags, All panel bags, Conductive FIBC and Static dissipative FIBCs. In addition to FIBC, the Company also manufactures various woven polypropylene products including Small bags, Box woven bags, Roofing under laying fabric, Courier bags, Ground covers, Silt fence and Geotextiles. The Company offers woven bags and fabrics in both PP and HDPE. Its products are UV stabilized and pre-conditioned against shrinkage. Thus although company's name has Rasayaan (that stands for chemicals), it is in the packaging material manufacturing. To part finance its expansion plans and capital expenditure the company is coming out with a book building process IPO with an offer of 4500000 equity share of Rs. 10 each within a price band of Rs. 72-79. The issue opens on 21.09.11 and closes on 23.09.11. Minimum application is to be made for 80 shares and in multiples thereof. Shares will be listed on BSE and NSE.
The issue is lead managed by Chartered Capital and Investment Ltd. that brought six IPOs in the recent past out of which five IPOs gave positive returns on the debut day. Link Intime India Pvt. Ltd is working as registrar to the issue. BRICKWORK has assigned IPO Grade 2 to this IPO indicating at below average fundamentals of the company.
On the performance front, the company has posted an average EPS of Rs. 2.51. For the year 2010-11 it posted a net profit of Rs. 1.80 crore on a turnover of Rs. 46.13 crore against net profit of Rs. 1.95 crore on a turnover of Rs. 30.61 crore for 2008-09 indicating at reduced margings. On enhanced equity of Rs. 17.72 crore, this earnings translated into an EPS of Rs.1.01 and based on this the asking price is around 72 P/E on the lower price band and thus it is priced exorbitantly. AVOID investment.
Review By Dilip Davda on September 21, 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 RDB Rasayans Ltd. offers an early investment opportunity in RDB Rasayans Ltd.. A stock market investor can buy RDB Rasayans IPO shares by applying in IPO before RDB Rasayans Ltd. shares get listed at the stock exchanges. An investor could invest in RDB Rasayans IPO for short term listing gain or a long term.
Read the RDB Rasayans IPO recommendations by the leading analyst and leading stock brokers.
RDB Rasayans IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the RDB Rasayans IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is RDB Rasayans IPO?"
Our recommendation for RDB Rasayans IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the RDB Rasayans IPO.
The RDB Rasayans IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit RDB Rasayans IPO allotment status to check.
