Review By on September 7, 2014
Sirohia & Sons is engaged in the business of dealing in fertilizers and pesticides catering primarily to Tea Industry located in the North East region of the Country, particularly the state of Assam and West Bengal. It receives orders of the specific fertilizers and pesticides required by the Tea Estates through its direct marketing and procure them from the manufacturers which are mostly multinational companies like BASF India Limited, Bayer Cropscience India Limited, Biostadt India Limited, DIC India Limited etc,.
Some of the products which the company is dealing include DELTAMETHREINE, CYPERMETHRIN, BACILLUS, THIACLOPRID and METHOMYL.
To meet its long term working capital requirements, the company is offering 3000000 equity shares of Rs. 10 each at a fixed price of Rs. 12 per share to mobilize Rs. 3.60 crore. From 2003 to 2008 company made preferential equity issue at a price of Rs. 50 per share and between 2011-13 it was done at a price of Rs. 30 per share. This has helped company to show NAV of Rs. 30 per share. Post IPO its equity will rise to Rs. 10.26 crore. Issue opens for subscription on 08.09.14 and will close on 10.09.14. It will be listed on BSE SME. Minimum application is to be made for 10000 shares and in multiples thereof, thereafter. Issue is lead managed by VC Corporate Advisors Pvt Ltd. and registrar to the issue is Adroit Corporate Services Pvt. Ltd.
Company has inconsistency in performance track records. In fact for past five fiscals, its top and bottom line has wide mismatch. For fiscals 2009-10 to 2011-12 its top line remained around Rs. 23 crore and net profit was in the region of Rs. 0.05 crore. For 2012-13 it earned net profit of Rs. 0.08 crore on a turnover of Rs. 16.89 crore and for 2013-14 it has posted net profit of Rs. 0.14 crore on a turnover of Rs. 11.50 crore. Thus while turnover is showing declining pattern, profit is showing rising pattern, which is really surprising. Last three fiscals average EPs is Rs. 0.37. Based on 2013-14 workings the asking price on fully diluted equity stands at 136 P/E which is making this issue a pricy bet.
On merchant banker’s front, this is second mandate of SME IPO and first one has give rewards to investors with erratic movements of prices for past two years.
Avoid
(Disclaimer: Author has no plans to invest in this IPO)
Review By on September 7, 2014
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 Sirohia & Sons Ltd. offers an early investment opportunity in Sirohia & Sons Ltd.. A stock market investor can buy Sirohia & Sons IPO shares by applying in IPO before Sirohia & Sons Ltd. shares get listed at the stock exchanges. An investor could invest in Sirohia & Sons IPO for short term listing gain or a long term.
Read the Sirohia & Sons IPO recommendations by the leading analyst and leading stock brokers.
Sirohia & Sons IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Sirohia & Sons IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Sirohia & Sons IPO?"
Our recommendation for Sirohia & Sons IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Sirohia & Sons IPO.
The Sirohia & Sons IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Sirohia & Sons IPO allotment status to check.
