Review By on September 28, 2016
Sakar Healthcare Ltd (SHL) is an Indian pharmaceutical company engaged in the manufacturing and marketing of its pharmaceutical formulations for domestic and international markets. Domestic sale of the company is a deemed exports as third party exports it. The company also undertakes contract manufacturing for Indian and MNC companies in India. SHL’s pharmaceutical formulations relates to analgesics, antielminthics, anti coagulants, anti malarial, anti spasmodic, antianemics, antibiotics, anti-emetics, anti-histamines, bronchodilators, corticosteroids, cough and cold preparations, multi vitamins etc. As of 31.03.16 it had 35 distributors in various markets.
To part finance setting up of new Lyophilization facility to manufacture Lyophilized products, obtaining registration of Europe Union GMP, registering new products, working capital needs and other general corpus funds, the company is coming out with a maiden IPO of 2961000 equity shares of Rs. 10 each via book building route with a price band of Rs. 42-50 to mobilize Rs. 12.44 to 14.81 crore. Issue opens for subscription on 30.09.16 and will close on 05.10.16. 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 Link Intime India Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on NSE SME Emerge platform. So far entire equity issued at par by the company. Post IPO its current paid up equity capital of Rs. 8 crore will stand enhanced to Rs. 10.96 crore.
On performance front, for last four fiscals, the company has reported turnover / net profits of Rs. 21.97 cr. / Rs. 1.45 cr. (FY 13), Rs. 29.71 cr. / Rs. 1.75 cr. (FY 14), Rs. 35.05 cr. / Rs. 1.84 cr. (FY 15) and Rs. 41.43 cr. / Rs. 2.33 cr. (FY16). If we attribute the latest earnings on fully diluted equity post IPO then asking price is at a P/E of 19 to 23 (based on lower and upper price bands) and at a P/BV of 2 plus. Some of its peers are trading at a P/E of 13 to 40. Thus issue appears to have been priced on the higher side.
On merchant banker’s front, this is 27th Mandate from its stable and past mandates have shown mixed trends.
Conclusion: Considering hire pricing, only cash surplus risk savvy investors may consider it for long term, others may ignore.
Review By on September 28, 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 Sakar Healthcare Ltd. offers an early investment opportunity in Sakar Healthcare Ltd.. A stock market investor can buy Sakar Healthcare IPO shares by applying in IPO before Sakar Healthcare Ltd. shares get listed at the stock exchanges. An investor could invest in Sakar Healthcare IPO for short term listing gain or a long term.
Read the Sakar Healthcare IPO recommendations by the leading analyst and leading stock brokers.
Sakar Healthcare IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Sakar Healthcare IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Sakar Healthcare IPO?"
Our recommendation for Sakar Healthcare IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Sakar Healthcare IPO.
The Sakar Healthcare IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Sakar Healthcare IPO allotment status to check.
