Review By on September 12, 2017
Shree Tirupati Balaji FIBC Ltd. (STBF) is engaged in manufacturing and supply of High Density Polyethylene (HDPE) / Polypropylene (PP) woven sacks, Flexible Intermediate Bulk Container (FIBC). Its manufacturing unit is situated at SEZ area located at Pithampur, Dist. Dhar, MP. Majority of its sales are from exports to countries like USA, UK, Australia, Germany, Italy, Spain, New Zealand etc.
To part finance its working capital and general corpus fund needs, STBF is coming out with a maiden IPO of 2700000 equity share of Rs. 10 each via book building route with a price band of Rs. 36-40 to mobilize Rs. 9.72 to Rs. 10.80 crore (based on lower and upper price bands). Issue opens for subscription on 21.09.17 and will close on 26.09.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue constitutes 26.65% of the fully diluted paid up equity capital of the company post issue. BRLMs to this offer are Pantomath Capital Advisors Pvt. Ltd. and SIDBI (Small Industries Development Bank of India). Bigshare Services Pvt. Ltd. is the registrar to the issue. Having issued initial equity at par, it raised further equity in a price range of Rs. 80 to Rs. 113 between July 2010 and March 2013. It has also issued bonus shares in the ratio of 11 shares for every 1 share held in July 2017. Post issue, STBF’s current paid up equity capital of Rs. 7.43 crore will stand enhanced to Rs. 10.13 crore.
On performance front, STBF has posted turnover/net profits of Rs. 40.43 cr. / Rs. 2.24 cr. (FY14), Rs. 54.13 cr. / Rs. 2.44 cr. (FY15), Rs. 62.09 cr. / Rs. 3.38 cr. (FY16) and Rs. 69.80 cr. / Rs. 2.87 cr. (FY17). There has been inconsistency in PBT for last four fiscals. If we attribute latest earnings on fully diluted equity post issue then asking price is at a P/E of around 14 plus (on the upper price band - against peers P/E ranging from 11 to 33). For last three fiscals, its average EPS is Rs. 4.00 (on pre-bonus equity) and average RoNW is 19.60%. Issue is priced at a P/BV of 1.7. Thus issue is priced reasonably.
On merchant banker’s front, this is the 46th mandate from Pantomath in last three years. Out of last 10 recent listings, 1 opened at discount, 1 at par and the rest with 1 to 18% premium on IPO price. This is the 2nd mandate from SIDBI and the last listing in 2015 opened with 10% plus premium on the date of listing.
Conclusion: Investment may be considered from medium to long term.
Review By on September 12, 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 Tirupati Balajee FIBC Ltd. offers an early investment opportunity in Shree Tirupati Balajee FIBC Ltd.. A stock market investor can buy Shree Tirupati Balajee FIBC IPO shares by applying in IPO before Shree Tirupati Balajee FIBC Ltd. shares get listed at the stock exchanges. An investor could invest in Shree Tirupati Balajee FIBC IPO for short term listing gain or a long term.
Read the Shree Tirupati Balajee FIBC IPO recommendations by the leading analyst and leading stock brokers.
Shree Tirupati Balajee FIBC IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Shree Tirupati Balajee FIBC IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Shree Tirupati Balajee FIBC IPO?"
Our recommendation for Shree Tirupati Balajee FIBC IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Shree Tirupati Balajee FIBC IPO.
The Shree Tirupati Balajee FIBC IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Shree Tirupati Balajee FIBC IPO allotment status to check.
