Review By on September 25, 2017
Shree Ganesh Remedies Ltd. (SGR) is engaged in manufacturing and dispatch of drug intermediates and chemicals like amine hydrochloride and specialty fine chemicals for pharmaceutical industry. SGR manufactures products relating to antipsychotic, antiseptic, deprotonation reactions, hyperlipidemia, Alzheimer and anti-viral.
To part finance setting up of choloro compound derivatives manufacturing plant, general corpus fund needs, the company is coming out with a maiden IPO of 2376000 equity share of Rs. 10 each at a fixed price of Rs.36 per share to mobilize Rs.8.55 crore. Issue opens for subscription on 28.09.17 and will close on 05.10.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Fedex Securities Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.48% of the post issue paid up capital of the company. From incorporation till May 2008 it raised equity at par, thereafter; it raised further equity in the price range of Rs. 22.81 to Rs. 70 per share and has also issued bonus shares in the ratio of 5 for 1 in August 2017. Post issue its current paid up equity capital of Rs. 6.60 crore will stand enhanced to Rs. 8.97 crore.
On performance front, SGR has reported turnover/net profits of Rs. 19.13 cr. / Rs. 3.21 cr. (FY14), Rs. 16.99 cr. / Rs. 1.27 cr. (FY15), Rs. 15.88 cr. / Rs. 1.08 cr. (FY16) and Rs. 20.32 cr. / Rs. 2.61 cr. (FY17). Thus it has shown inconsistency in top and bottom lines for last four fiscals. It has posted an average EPS of Rs. 2.85 and average RoNW of 12.14% on an equity capital of Rs. 1.10 crore. Issue is priced at a P/BV of 2.81. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 12 plus against peers trading in the range of 23 to 49 P/E. Thus issue is priced justifiably, but inconsistency in performance raises concern.
This the first mandate from Fedex Securities Ltd and it has no track record.
Conclusion: Inconsistency in performance is a major concern. However, cash surplus investors may consider investment for long term. (Subscribe)
Review By on September 25, 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 Shree Ganesh Remedies Ltd. offers an early investment opportunity in Shree Ganesh Remedies Ltd.. A stock market investor can buy Shree Ganesh Remedies IPO shares by applying in IPO before Shree Ganesh Remedies Ltd. shares get listed at the stock exchanges. An investor could invest in Shree Ganesh Remedies IPO for short term listing gain or a long term.
Read the Shree Ganesh Remedies IPO recommendations by the leading analyst and leading stock brokers.
Shree Ganesh Remedies IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Shree Ganesh Remedies IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Shree Ganesh Remedies IPO?"
Our recommendation for Shree Ganesh Remedies IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Shree Ganesh Remedies IPO.
The Shree Ganesh Remedies IPO allotment status will be available on or around October 10, 2017. The allotted shares will be credited in demat account by October 12, 2017. Visit Shree Ganesh Remedies IPO allotment status to check.
