Review By Dilip Davda on May 25, 2018
Shree Vasu Logistics Ltd. (SVLL) is engaged in providing various logistic services such as acting as carrying and forwarding agent, warehousing and inventory management and distribution management thrugh secondary transportation. SVLL has positioned itself as third party logistics services provider and operates on carrying and forwarding agent model.
To part finance its working capital and general corporate fund needs, SVLL is coming out with a maiden IPO of 2064000 equity shares of Rs. 10 each at a fixed price of Rs. 45 per share to mobilize Rs. 9.29 crore. Issue opens for subscription on 23.05.18 and will close on 25.05.18. 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 is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 27% of the post issue paid up capital of the company. Having raised initial equity at par, it raised further equity at a price of Rs. 50 per share in November 2013 and has also issued bonus shares in the ratio of 8 for 1 in February 2018. Average cost of acquisition of shares by the promoters is Rs. 1.97 and Rs. 2.20 per share. Post issue, its current paid up equity capital of Rs. 5.58 cr. will stand enhanced to Rs. 7.64 cr.
On performance front, for last four fiscals SVLL has posted turnover/net profits of Rs. 18.06 cr. / Rs. 0.53 cr. (FY14), Rs. 21.78 cr. / Rs. 0.66 cr. (FY15), Rs. 23.02 cr. / Rs. 0.76 cr. (FY16) and Rs. 27.69 cr. / Rs. 0.79 cr. (FY17). For first nine months ended on 31.12.17 of FY18 it has earned net profit of Rs. 1.89 cr. on a turnover of Rs. 22.79 cr. Super profits for first three quarters of FY18 raises concern. For last three fiscals it has posted an average EPS of Rs. 1.35 and an average RoNW of 14.47%. Issue is priced at a P/BV of 3.28 on the basis of its NAV of Rs. 13.74 as on 31.12.17 and at a P/BV of 2.03 on the basis of post issue NAV of Rs. 22.18. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 14 against industry average of 14. As per offer document it has considered Patel Integrated as its listed peer which is trading around 14 (as on 18.05.18). Thus issue is fully priced. Its debt equity ratio as on 31.12.17 is 2.25.
On merchant banker’s front, this is 60th mandate from its stable in last three fiscals. Out of last 10 listings all opened with a premium on offer price ranging from 1.59% to 40% on the day of listing.
There is no harm in giving this fully priced issue a miss.
Review By Dilip Davda on May 25, 2018
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 Vasu Logistics Ltd. offers an early investment opportunity in Shree Vasu Logistics Ltd.. A stock market investor can buy Shree Vasu Logistics IPO shares by applying in IPO before Shree Vasu Logistics Ltd. shares get listed at the stock exchanges. An investor could invest in Shree Vasu Logistics IPO for short term listing gain or a long term.
Read the Shree Vasu Logistics IPO recommendations by the leading analyst and leading stock brokers.
Shree Vasu Logistics IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Shree Vasu Logistics IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Shree Vasu Logistics IPO?"
Our recommendation for Shree Vasu Logistics IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Shree Vasu Logistics IPO.
The Shree Vasu Logistics IPO allotment status will be available on or around May 30, 2018. The allotted shares will be credited in demat account by June 1, 2018. Visit Shree Vasu Logistics IPO allotment status to check.
