Review By on March 29, 2013
In a surprised announcement, we have yet another BSE SME IPO opening on 28.03.13, i.e. Samruddhi Realty Ltd. (SRL) taking total tally to 24 SME IPOs for BSE SME Listing. Details of the same are as under:
After doing small jobs in the initial years of its operations for execution of luxury apartments in small size segment and completing them with assured quality standards and timely delivery. Till 2009 it completed 125000 sq. ft of constrictions and currently has ongoing contracts for a Developable & Saleable Area of approx. 4,46,117 Sq.Feet and 2 upcoming Projects with a Developable & Saleable Area of approx. 4,75,000 Sq. Feet. For this projects, the company raised loans from various sources. Now to repay some of these loans and listing purpose, it is coming out with an IPO for 2170000 equity share of Rs. 10 each at a fixed price of Rs. 12 per share to mobilize Rs. 2.60 crore. The issue is opening for subscription on 28.03.13 and will close on 03.04.13. Minimum application is to be made for 10000 shares and in multiples thereof, thereafter. Post issue, the shares will be listed on BSE SME. Hem Securities Ltd. is the sole manager for this issue and Sharex Dynamic India (P) Ltd is the registrar to the issue.
On performance front for the company, its top line witnessed diminishing patter from Rs. 9.04 crore in 2008 to Rs. 3.46 crore in 2009 and Rs. 2.89 crore in 2010. It surged to Rs. 5.65 crore in 2011 and further up to Rs. 12.56 crore in 2012 and for first six months its top line is at Rs. 9.87 crore. However, its profit remained inconsistent at Rs. 0.21 crore (2008), Loss of Rs. 0.41 crore (2009), Rs. 0.45 crore (2010), Rs. 0.29 crore (2011) and Rs. 0.40 crore (2012) and for first half of current fiscal at Rs. 0.59 crore. For last three fiscal, average EPS is Rs. 3.25. (On consolidated basis). Entire existing equity is raised at a price of Rs. 10 per share at various stages. Post IPO its equity will rise to Rs. 7 crore and if we attribute first half earnings on annualized basis, then the offer is at a P/E of 7 plus.
On Merchant Banker's front, they had 2 mandates in the pat out of which only 1 has given listing gains.
Considering the current down-turn in realty sector and the entry barrier, better to skip this IPO.
Review By on March 29, 2013
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 Samruddhi Realty Ltd. offers an early investment opportunity in Samruddhi Realty Ltd.. A stock market investor can buy Samruddhi Realty IPO shares by applying in IPO before Samruddhi Realty Ltd. shares get listed at the stock exchanges. An investor could invest in Samruddhi Realty IPO for short term listing gain or a long term.
Read the Samruddhi Realty IPO recommendations by the leading analyst and leading stock brokers.
Samruddhi Realty IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Samruddhi Realty IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Samruddhi Realty IPO?"
Our recommendation for Samruddhi Realty IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Samruddhi Realty IPO.
The Samruddhi Realty IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Samruddhi Realty IPO allotment status to check.
