Review By on March 29, 2016
Ruby Cables Ltd. (RCL) is engaged in manufacturing and dealing of qualitative conductors, cables and wires. Currently it has installed capacity of 50000 kms p.a. of conductors and 3200 kms p.a. of cables. Its products are sold under the brand name “Ru Cab”.
To part finance its working capital and other funds requirement, the company is coming out with a maiden IPO of 2001000 equity share of Rs. 10 each at a fixed price of Rs. 50 per share to mobilize Rs. 10.01 crore. Issue opens for subscription on 30.03.16 and will close on 05.04.16. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Issue is solely managed by Pantomath Capital Advisors Pvt Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE SME.
On performance front, it has shown consistent growth in top line from 2011 to 2014, but it declined in 2015. Its turnover grew from Rs. 27.77 crore in FY 11 to Rs. 97.92 crore in FY 14 and declined to Rs. 86.13 for FY15. Its net profits also marked improvement from Rs. 0.44 crore (FY11 ) to Rs. 3.27 crore (FY14), but it incurred losses of Rs. 2.38 crore for FY 15. For six months ended 30.09.15 it has posted net profit of Rs. 0.42 crore on a turnover of Rs. 48.21 crore. It issued equity shares at par from 1996 to 2007. In 2012 it issued further equity at a price of Rs. 30 per share and in November 15 at a price of Rs. 50 per share. Its current paid up equity capital of Rs. 4.25 crore will stand enhanced to Rs. 6.25 crore post IPO. If we annualize these earnings then EPS on fully diluted equity then EPS will stand at Rs. 1.34 that will translate asking price at a P/E of 37 plus. Thus issue appears to be highly priced compared to its some of peers trading at a P/E of 20 or below.
On merchant banker’s front, this is 16th IPO from its stable and earlier 15 mandates have given mixed performances post listing.
Conclusion: Only risk savvy fund surplus investors may consider parking of funds for long term.
Review By on March 29, 2016
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 Ruby Cables Ltd. offers an early investment opportunity in Ruby Cables Ltd.. A stock market investor can buy Ruby Cables IPO shares by applying in IPO before Ruby Cables Ltd. shares get listed at the stock exchanges. An investor could invest in Ruby Cables IPO for short term listing gain or a long term.
Read the Ruby Cables IPO recommendations by the leading analyst and leading stock brokers.
Ruby Cables IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Ruby Cables IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Ruby Cables IPO?"
Our recommendation for Ruby Cables IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Ruby Cables IPO.
The Ruby Cables IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Ruby Cables IPO allotment status to check.
