Review By on February 15, 2014
While we have three Tax Free Bonds offer, yet another BSE SME IPO is entering in the capital market. Details of the same are as under:
SI. VI. SHIPPING CORPORATION LIMITED: (SVSC)The Company is a new entrant to the Indian shipbuilding sector and proposes to develop a modern shipyard spread over 24 acres to build ships of up to 120 meter length at the Dahej Shipbuilding Park developed by Gujarat Maritime Board supported by Government of Gujarat, India. Its focus would be to bid for ships up to 120 meter length in cargo, offshore, and other specialized segments. Currently it is working as a subcontractor for fabrication of hull with L&T’s shipyard at Hazira. Immediately on incorporation, SVSC bagged order of fabrication and erection of aluminum hull for 7 high speed Interceptor boats from L&T’s Hazira Shipyard. The company has already executed the first boat in a record time. It has enabled it to develop a team and capability through which it can undertake new shipbuilding activities. A highly professional and motivated team of professionals in the relevant field manages the affairs of Company.
Today, almost 60% of the total fabrication work allotted by L&T’s Hazira Shipyard is done by the company and in a short span it also took over operation of modern CNC machine for preparation of fabrication material for L&T’s Hazira Shipyard. Recently the company is also been awarded piping work for high speed interceptor boats by L&T’s Hazira Shipyard.
The company is issuing 2742000 equity share of Rs. 10 each at a fixed price of Rs. 25 per share to mobilize Rs. 6.86 crore to meet repayment of debt and general corpus funds for capex. The issue is opening for subscription on 18.02.14 and will close on 21.02.14. Minimum application is to be made for 6000 shares and in multiples thereof, thereafter. Post this issue current equity of Rs. 3.01 crore will rise to Rs. 5.75 crore. Issue is lead managed by Pantomath Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd is the registrar to the offer.
On performance front, the company has posted an average EPS of Rs. 5.43 for last two fiscal and for first six months ended 30.09.13 it has earned net profit of Rs. 0.07 crore on a turnover of Rs. 1.10 crore translating into EPS of Rs. 0.47 on annualized basis. If we attribute these earnings, then asking price is at a P/E of 53+ and at a P/BV of 2.4 making it a costly offer.
This being the first mandate for lead manager, no track records are available.
Avoid this costly offer having entry barrier as well.
Review By on February 15, 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 SI.VI.Shipping Corp.Ltd. offers an early investment opportunity in SI.VI.Shipping Corp.Ltd.. A stock market investor can buy SI.VI.Shipping IPO shares by applying in IPO before SI.VI.Shipping Corp.Ltd. shares get listed at the stock exchanges. An investor could invest in SI.VI.Shipping IPO for short term listing gain or a long term.
Read the SI.VI.Shipping IPO recommendations by the leading analyst and leading stock brokers.
SI.VI.Shipping IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the SI.VI.Shipping IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is SI.VI.Shipping IPO?"
Our recommendation for SI.VI.Shipping IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the SI.VI.Shipping IPO.
The SI.VI.Shipping IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit SI.VI.Shipping IPO allotment status to check.
