Review By on June 28, 2017
Shrenik Ltd is (SL) primarily engaged in the business of trading of different types of papers in Gujarat and Rajasthan through distribution channel. The company serves customers with variety of papers like copier, maplitho, coated paper, FBB Board and a speciality paper commodity royal executive bond. Besides being a wholesaler is has also introduces its own brand “Shrenik” covering copier, sticker sheet etc. It’s customer base in Gujarat and Rajasthan is around 3000 plus. It is also a wholesaler for Tamil Nadu Newsprint and Papers Ltd in Gujarat and for Asia Pulp in Gujarat and Rajasthan.
To part finance its working capital and general corpus fund needs, the company is coming out with a maiden IPO of 5400000 equity share of Rs. 10 each at a fixed price of Rs. 40 per share to mobilize Rs. 21.60 crore. Issue opens for subscription on 06.07.2017 and will close on 10.07.2017. Minimum application is to be made for 3000 shares and in multiples thereof, thereafter. Post allotment shares will be listed on NSE SME Emerge. Issue is lead managed by Pantomath Capital Advisors Pvt Ltd and Link Intime India Pvt Ltd is the registrar to the issue. After initial equity for MoA issue at par, it raised further equity at a price of Rs. 14 per share. Post issue, its current paid up equity capital of Rs. 15.00 crore will stand enhanced to Rs. 20.40 crore.
On performance front, the company has posted turnover/net profits of Rs.213.28 cr. / Rs. 0.96 cr. (FY14), Rs. 265.86 cr. / Rs. 1.03 cr. (FY15), Rs. 329.47 cr. / Rs. 2.94 cr. (FY16) and Rs. 428.09 cr. / Rs. 4.19 cr. (FY17). Last three year’s average EPS on the current paid up equity is around Rs. 2.90. If we attribute latest earnings on fully diluted equity post issue then asking price is at a P/E of 19 plus and at a P/BV of 2.16. Last three year’s average RoNW is 13.80%. As per IPO documents, the company has no listed peer to compare with. Thus issue appears to be fully priced.
On merchant banker’s front, this is the 40th mandate from its stable in last three fiscals, and out of latest 10 listings nine gave positive rewards on offer price while one opened at par to offer value on the listing date.
Conclusion: Investors may consider moderate investment in this fully priced issue for short to long term.
Review By on June 28, 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 Shrenik Ltd. offers an early investment opportunity in Shrenik Ltd.. A stock market investor can buy Shrenik IPO shares by applying in IPO before Shrenik Ltd. shares get listed at the stock exchanges. An investor could invest in Shrenik IPO for short term listing gain or a long term.
Read the Shrenik IPO recommendations by the leading analyst and leading stock brokers.
Shrenik IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Shrenik IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Shrenik IPO?"
Our recommendation for Shrenik IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Shrenik IPO.
The Shrenik IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Shrenik IPO allotment status to check.
