Review By on November 14, 2017
Sharika Enterprises Ltd. (SEL) is engaged in Engineering Procurement Construction (EPC) contracts, specialized assembling, trading activities, Erection Services, representation services to majorly power Generation, Transmission and Distribution sector. Company has grown consistently over the years and widened its portfolio which covers installing power transmission EHV cables, designing & installing EMS (Energy Management System) and allied distribution automation Equipments such as Autoreclosers, fault passage indicators (FPI) etc., designing and installing of Solar Power Generation plants.
Company has introduced LS Cables in India for 220 kV XLPE cables and 400 kV XLPE cables in the year 2008. It is also associated with Andritz Hydro since 2004 in developing their Hydro Power Projects with National Hydroelectric Power Corporation (NHPC), National Thermal Power Corporation (NTPC) and State Electricity Boards, especially in north and north-east India with projects like NHPC/4×41 MW Teesta Low Dam-III, MeSEB/2×42 MW Myntdu Leshka, HPSEB/4×15 MW RMU & LE Bassi HEP, HPSEB/2×2.25 MW Bhaba Augmentation HEP, HPPCL/3×65 MW Kashang HEP etc.
To meet its working capital and general corpus funds needs, SEL is coming out with a maiden IPO of 3225000 equity shares of Rs. 10 each at a fixed price of Rs.43 per share to mobilize Rs. 13.87 crore. Issue opens for subscription on 15.11.17 and will close on 17.11.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue constitutes 29.79% of post issue paid up capital of the company. Issue is solely lead managed by Swastika Investmart Ltd. and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Cost of acquisition of shares by promoters is Rs. 0.13 per share. It has issued entire equity at par so far and has also issued bonus shares in the ratio of 75 for 1 in August 2017. Post issue its current paid up equity capital of Rs. 7.60 crore will stand enhanced to Rs. 10.83 crore.
On performance front, SEL has (on a consolidated basis) posted turnover/net profits of Rs. 10.81 cr. / Rs. – (0.27) cr. (FY14), Rs. 17.96 cr. / Rs. – (0.48) cr. (FY15), Rs. 18.89 cr. / Rs. 0.98 cr. (FY16), Rs. 23.53 cr. / Rs. 2.02 cr. (FY17). For first two months of current fiscal it has reported net profit of Rs. 0.49 cr. on a turnover of Rs. 2.72 cr. For last three fiscals, it has posted average EPS of Rs.1.65 and average RoNW of 13.07% on an equity capital of Rs. 0.10 crore. Asking price is at a P/BV of 1.91 on the basis of post issue NAV. If we annualize latest earnings and attribute it on fully diluted equity post issue, then issue is priced at a P/E of around 16 against its peers ( as per offer documents they are L&T, Engineers India) trading on an industry average of 29 plus. Thus issue appears to have been priced reasonably.
On merchant banker’s front, this is the 8th mandate from its stable so far and last 7 listings has opened at a premium of 4 to 20% on the offer price on debut day.
Conclusion: Investment may be considered for medium to long term. (Subscribe).
Review By on November 14, 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 Sharika Enterprises Ltd. offers an early investment opportunity in Sharika Enterprises Ltd.. A stock market investor can buy Sharika Enterprises IPO shares by applying in IPO before Sharika Enterprises Ltd. shares get listed at the stock exchanges. An investor could invest in Sharika Enterprises IPO for short term listing gain or a long term.
Read the Sharika Enterprises IPO recommendations by the leading analyst and leading stock brokers.
Sharika Enterprises IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Sharika Enterprises IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Sharika Enterprises IPO?"
Our recommendation for Sharika Enterprises IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Sharika Enterprises IPO.
The Sharika Enterprises IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Sharika Enterprises IPO allotment status to check.
